2015 (8) TMI 1271 - AT - Central Excise

Clearance of POY made to their sister/own unit - adoption of assessable value available with them in relation to the transaction value adopted for sale to independent buyers, in accordance with Rule 4 of Valuation Rules, 2000 or the said clearances are to be assessed @ 110% of cost of production based on CAS 4 certificates in accordance with Rule 8 of Valuation Rules, 2000 as per the orders of Adjudicating authority - Held that - The issue is no more res integra. The Tribunal in the case of Steel Complex Ltd Vs CCE, Calicut (2003 (9) TMI 252 - CESTAT, BANGALORE ), on the identical issue, allowed the appeal of the Assessee. The said decision was upheld by the Hon ble Supreme Court as reported (2015 (10) TMI 500 - SUPREME COURT). It has been held that Rule 8 of the Valuation Rules, 2000, which was prevailing at that time, will have no application, where the goods are only partly sold under ex-factory basis and partly cleared for captive consumption. The Hon ble Gujarat High Court in the case of Commissioner of Central Excise, Bhavnagar Vs Ultratech Cement Pvt. Ltd (2014 (9) TMI 187 - GUJARAT HIGH COURT ) dismissed the appeal filed by the Revenue. It has been held that the captive consumption partly and sale to independent buyers partly, value is to be determined under Rule 4 of Central Excise Valuation Rules, 2000 and not under Rule 8 of the said Rules. We have also noticed that Rule 8 of the Valuation Rules, 2000 was amended by Notification No.14/2013-CE(NT), dt.22.11.2013. The present case is for the period prior to 22.11.2013. - Decided in favour of assessee

Summary

Issues: Valuation of goods under Central Excise Valuation Rules, 2000

The judgment by the Appellate Tribunal CESTAT AHMEDABAD involved the issue of whether the clearance of POY by the Appellant to their sister/own unit should be assessed based on the assessable value for independent buyers or at 110% of the cost of production as per Rule 8 of Valuation Rules, 2000. The Tribunal referred to previous decisions by the Hon'ble Supreme Court, Tribunal, and Larger Bench, highlighting the case of Steel Complex Ltd Vs CCE, Calicut, where the appeal of the Assessee was allowed on a similar issue. The Tribunal emphasized that Rule 8 of the Valuation Rules, 2000 does not apply when goods are partly sold under ex-factory basis and partly for captive consumption. The judgment also cited the decision of the Hon'ble Gujarat High Court in the case of Commissioner of Central Excise Vs Ultratech Cement Pvt. Ltd, affirming that valuation for captive consumption and sale to independent buyers should be determined under Rule 4 of the Valuation Rules, 2000, not Rule 8. It was noted that Rule 8 of the Valuation Rules, 2000 was amended post the period in question, and based on these precedents, the impugned order was set aside, and the appeal by the Appellant was allowed.

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