2009 (10) TMI 711 - AT - Central Excise

Valuation - demand on the ground that the goods cleared to the other units of the appellants are to be assessed as per the provisions of Rule 8 of Valuation Rules, 2000 - Held that - the appellants cleared 99% goods to the independent buyers - Some portion of the production is cleared to the other units of the appellants - reliance placed in the decision of Larger Bench, in the case of Ispat Industries Ltd. v. CCEx., Raigad 2007 (2) TMI 5 - CESTAT, MUMBAI , where it was held that where a part of the production is cleared to the independent buyers, the provision of Rule 8 of the Valuation Rules are not applicable in respect of the goods which are cleared to other units - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Appeal against confirmed demand and penalty based on Rule 8 of Valuation Rules, 2000 for goods cleared to other units.

Analysis:
The appellants challenged an order confirming demand and imposing a penalty for clearing goods to other units under Rule 8 of Valuation Rules, 2000. The appellants argued that most of their production was sold to independent buyers at the same price as goods cleared to other units. They cited a precedent from the Tribunal to support their position that Rule 8 does not apply when goods are sold to other units alongside independent buyers. The Department, represented by the SDR, upheld the lower authority's decision, asserting that Rule 8 should be applied since the goods were cleared to other units. The Tribunal noted that while 99% of the goods were sold to independent buyers, a portion was cleared to other units. Relying on the precedent cited by the appellants, the Tribunal concluded that Rule 8 did not apply to goods sold to other units alongside independent buyers. Consequently, the impugned order was overturned, and the appeal was allowed.