2019 (2) TMI 1164 - AT - Central Excise

Method of Valuation - rule 11 or rule 7 of Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 or by resorting to Rule 8 of the said Rules? - goods manufactured and capitvely consumed - Held that - The wording of said Rule 11 of Valuation Rules, 2000 indicates that if the value of any excisable goods cannot be determined under Rules up to Rule 10A then the value is to be determined using reasonable means consistent with the principles and general provisions of Section 4. For the circumstances covered in the present case there is provision under Rule 8 of said Valuation Rules, 2000, which reads Rule 8 where the whole or part of the goods are not sold by the assessee but are used for consumption by him or on his behalf in the production or manufacture of other articles, the value of said goods i.e. consumed shall be 110% of the cost of production or manufacture of said goods. Since express provision covering the circumstances being available under said Rule 8 of Valuation Rules, 2000, there was no case to resort the provisions of said Rule 11 of Valuation Rules, 2000. Appeal allowed - decided in favor of appellant.

Summary

Issues:
Assessment of goods manufactured and captively consumed under Rule 11 or Rule 8 of Central Excise Valuation Rules, 2000.

Analysis:

1. Issue of Assessment under Rule 11 or Rule 8:
- The case involved appeals concerning the assessment of goods manufactured and captively consumed under Rule 11 or Rule 8 of Central Excise Valuation Rules, 2000. The appellants, manufacturers of Hologram, were issued show cause notices for demand of duty based on Rule 11. The Revenue contended that the goods in question, called "SHIM," should be assessed under Rule 11. The impugned Orders-in-Original confirmed the demand under Rule 11, leading to penalties.

2. Interpretation of Rules 11 and 8:
- The Tribunal examined the wording of Rule 11, which states that if the value of excisable goods cannot be determined under Rules up to Rule 10A, it should be determined using reasonable means consistent with Section 4. However, Rule 8 provides a specific provision for goods not sold but consumed in production, stating that the value of such goods shall be 110% of the cost of production. The Tribunal noted that since Rule 8 explicitly covers the circumstances of captively consumed goods, there was no need to resort to Rule 11 for assessment.

3. Decision and Conclusion:
- After analyzing the facts and provisions, the Tribunal held that the impugned Orders-in-Original were not sustainable as Rule 8 of Central Excise Valuation Rules, 2000 provided a clear provision for the assessment of captively consumed goods. Therefore, the appeals were allowed in favor of the appellants. The Tribunal directed that the appellants are entitled to consequential relief as per law.

This detailed analysis of the judgment highlights the key issues, the interpretation of relevant rules, and the ultimate decision reached by the Appellate Tribunal CESTAT ALLAHABAD in the case.