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2018 (5) TMI 480 - AT - Central ExciseValuation - Speed MS/HSD - case of the Department is that in case of Speed MS/HSD, the sale price of Speed MS/HSD at which the goods are sold from their depot should be applied - even though the goods cleared from the factory, plain MS/HSD were sold from the depot as Speed MS/HSD, whether the sale value of Speed MS/HSD or plain MS/HSD nearest to the time of clearance of the goods shall apply? - Rule 7 of the Central Excise Valuation Rules, 2000 Held that - from Rule 7, it is seen that when the goods are not sold from the place of removal but are transferred to depot from where excisable goods are to be sold after their clearance from the place of removal, but value shall be normal transaction value of such goods sold from the said other place at or about the same time and where such goods are not sold at or above the same value, at the time nearest to the time of removal of the goods under assessment. In the present case, the goods cleared from the factory is plain MS/HSD but the same goods are sold from the depot as Speed MS/HSD. Therefore, all the goods which are cleared as plain MS/HSD, which was subsequently sold as Speed MS/HSD, the sale price of such plain MS/HSD shall apply. Appeal allowed - decided in favor of appellant.
Issues:
Interpretation of Rule 7 of Central Excise Valuation Rules, 2000 regarding the valuation of goods sold in different forms from depot. Analysis: The case involved a dispute regarding the valuation of Motor Spirit (MS) and High Speed Diesel (HSD) sold by the appellants, either in plain form or as Speed MS/HSD, from their depot. The appellants applied the sale price of plain MS/HSD nearest to the time of removal of goods from the factory for excise duty calculation, while the Department argued that the sale price of Speed MS/HSD from the depot should be applied. The appellant contended that Rule 7 of Central Excise Valuation Rules, 2000 mandates applying the sale price of goods cleared from the factory as such, irrespective of the form in which they are sold later. They relied on legal precedents to support their argument, emphasizing that any value addition post-removal should not affect the assessable value of goods cleared from the factory. On the other hand, the Revenue maintained that the sale price of goods sold from the depot, in this case, Speed MS/HSD, should be considered under Rule 7. They cited notifications, circulars, and judgments to support their stance, highlighting that the sale price of the goods at the depot should be the basis for valuation. After considering the submissions and Rule 7 of the Central Excise Valuation Rules, the Tribunal analyzed that the rule specifies that when goods are transferred to a depot for sale after removal from the factory, the normal transaction value of such goods sold from the depot at or about the same time should be considered. In this context, the Tribunal concluded that the sale price of plain MS/HSD cleared from the factory and sold as Speed MS/HSD from the depot should be applied for valuation. They interpreted the term "such goods" in Rule 7 to refer to the goods originally cleared from the factory, i.e., plain MS/HSD. Therefore, they disagreed with the findings of the impugned order and set it aside, allowing the appeals of the appellants. In conclusion, the Tribunal's judgment clarified the application of Rule 7 in determining the valuation of goods sold in different forms from the depot, emphasizing the importance of considering the original form of the goods cleared from the factory for assessment purposes.
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