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2018 (2) TMI 132 - AT - Central ExciseValuation - goods cleared to units/branches located all over India for consumption/use to provide services to their customers - The case of the department is that as there were no sale it appeared that the value of excisable goods manufactured by the respondent should have been determined as per Section 4(1) (b) of the Central Excise Act, 1944 read with Rule 11 and Rule 8 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 i.e. by cost construction method - Held that - the matter needs to be referred to the Larger Bench to resolve the following question - Whether during the period after 1st July 2000 the valuation of the goods supplied which does not involve as sale should be done under Rule 8 of Central Excise Rules, 2000 or on the basis of cost of production without adding any notional profit - matter referred to Larger Bench.
Issues: Valuation of excisable goods under Central Excise Act, 1944 and Central Excise (Valuation) Rules, 2000.
Analysis: 1. Background: The case involves M/s. Bharat Sanchar Nigam Ltd., holding Central Excise Registration for manufacturing goods under Tariff Item No. 85173000. The dispute arose regarding the valuation of goods cleared to units/branches for consumption without sale, leading to a short payment of duty. 2. Revenue's Argument: The Revenue contended that the valuation should be at 110% of the cost of production as per Rule 8 of the Central Excise (Valuation) Rules, 2000, differing from the Tribunal's decision based on an earlier judgment. 3. Respondent's Defense: The respondent relied on a Tribunal decision in their favor, accepted by the Commissioner, arguing against the Revenue's change in stance. They cited various Supreme Court judgments supporting their position. 4. Tribunal's Decision: The Tribunal rejected the notion that the issue could not be re-decided, emphasizing the Tribunal's authority to independently assess legal matters. It determined that Rule 8 applied for valuation under the Central Excise (Valuation) Rules, 2000, as the goods were not sold but used for consumption. 5. Valuation Rules Application: The Tribunal clarified that Rule 11 allowed for valuation using suitable rules when direct rules did not apply. In this case, Rule 8 was deemed appropriate, mandating valuation at 110% of the cost of production for goods not sold but consumed. 6. Judicial Precedents: The Tribunal highlighted the importance of Rule 8 over earlier rules, emphasizing the departure from the previous valuation approach. It necessitated a reference to a Larger Bench to resolve the specific question of valuation for goods supplied without sale post-2000. 7. Conclusion: The Tribunal's decision upheld the valuation based on Rule 8 of the Central Excise (Valuation) Rules, 2000, advocating for a consistent approach and the need for further clarification through a Larger Bench for uniformity in such valuation matters. This comprehensive analysis outlines the legal intricacies involved in the judgment, focusing on the valuation of excisable goods under specific rules and the need for clarity and consistency in interpreting such provisions.
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