2017 (12) TMI 1208 - AT - Central Excise

What should be the valuation in respect of goods cleared to their own unit by the appellant when the transaction value of the same goods charged to independent customer is available? Held that - As per the Valuation Rules, under Section 4 the first principle is that if the transaction value is available, the same will prevail; in case transaction value is not available resort to be made under Section 4(1)(b) and Rules made thereunder - In the present case there is no dispute that for the same goods which were cleared to their own unit by the appellant, the transaction value charged to the independent customer is available. If that be so, the transaction value will prevail over the valuation under Rule 8 - even in case where the goods were supplied to their own related unit, the transaction value shall be preferred and applied. Appeal allowed - decided in favor of appellant.

Summary

Issues: Valuation of excisable goods cleared to own unit under Central Excise Valuation Rules 2000.

In this judgment by the Appellate Tribunal CESTAT MUMBAI, the issue revolved around the valuation of excisable goods cleared to the appellant's own unit under the Central Excise Valuation Rules 2000. The department contended that since the clearance was made to their own unit, the valuation should be governed by Rule 8 of the Valuation Rules. On the other hand, the appellant argued that the transaction value charged to independent customers should prevail even when goods are cleared to their own unit. The appellant's counsel referred to a previous Larger Bench decision in the case of Ispat Industries Ltd. to support their stance. The Tribunal noted that under Section 4 of the Valuation Rules, the transaction value should prevail if available, and in this case, the transaction value charged to independent customers was indeed available for the same goods cleared to the appellant's own unit. Therefore, the Tribunal concluded that the transaction value should be preferred and applied even in cases where goods are supplied to a related unit. The Tribunal also highlighted that the department had accepted a previous order where the transaction value was upheld based on the judgment in the Ispat Industries Ltd. case. Consequently, the Tribunal set aside the impugned order, ruling in favor of the appellant and allowing the appeal. The judgment was pronounced in court on 30/11/17 by Member (Judicial) Ramesh Nair.