2008 (2) TMI 35 - SC - Central Excise

Determination of A.V. of intermediate product grey textured yarn which is consumed captively in mfg. of final product dyed yarn which is sold in the market tribunal held that assessable value of the captively consumed grey yarn would be on the basis of the price at which the grey yarn was sold by the assessee to unrelated buyers in wholesale at the factory gate - finding recorded by the Tribunal is a finding of fact which cannot be interfered with

Summary

Issues:
Determination of assessable value against the Revenue in respect of intermediate product, i.e., textured yarn manufactured and consumed captively in the manufacture of dyed yarn.

Analysis:
The appeal before the Supreme Court was filed by the Revenue under Section 35L(b) of the Central Excise Act, 1944 against the Final Order passed by the Customs, Excise & Gold (Control) Appellate Tribunal. The issue revolved around the determination of assessable value concerning the grey textured yarn used captively in the manufacture of dyed yarn. The Revenue alleged that the assessee had undervalued the price of the grey textured yarn to evade payment of duty.

The Tribunal held that the assessee was selling a significant portion of the product to independent purchasers at the factory gate, and the price charged in these transactions should be considered the normal price of the grey yarn consumed captively. The assessee contended that since they also sold a portion of the grey textured yarn to unrelated buyers at the factory gate, the assessable value should be based on the sale price to unrelated buyers.

The key question in the case was whether the assessee had undervalued the textured yarn consumed captively in the production of dyed yarn. The Tribunal's finding, based on the price at which the grey yarn was sold to unrelated buyers, was upheld by the Supreme Court. The Court noted that the Revenue failed to provide any material on record to challenge the Tribunal's factual findings, leading to the dismissal of the appeal.

In conclusion, the Supreme Court dismissed the appeal, emphasizing that the Tribunal's factual findings regarding the assessable value of the grey yarn were conclusive and not subject to interference. The case highlighted the importance of correctly determining assessable values in excise matters to prevent duty evasion.