1987 (7) TMI 383 - AT - Central Excise

Summary

Issues:
- Appeal against the order of the Collector of Central Excise (Appeals), Madras involving the issue of valuation.

Detailed Analysis:

1. Facts of the Case:
- The appellants manufacture watches and components, utilizing most parts for captive consumption and selling a small fraction in the open market.
- They filed price lists under Section 4(l)(a) for sales through dealers and under Rule 6 for captively consumed goods.
- Initially, authorities approved both price lists, but later issued a show cause notice for differential duty based on prices approved in Part I for sales through dealers.

2. Appellant's Argument:
- Appellant argued that over 99.8% of goods were captively consumed, so Part VI prices should apply, not Part I prices for sales.
- They claimed the high prices to dealers prevented misuse for assembly into watches.
- Mentioned inability to benefit from Notification 201/79 due to low duty on watches and high duty on parts.

3. Department's Argument:
- Department contended that when normal price under Section 4(l)(a) is available, Rule 6 need not be applied for captive goods.
- Cited cases to support using normal price for assessment, regardless of the percentage of goods sold in the open market.
- Stated that the value of captively consumed goods should be based on comparable goods sold in the open market.

4. Judgment and Analysis:
- Tribunal analyzed whether a separate price for captively consumed goods under Rule 6 could be adopted when normal price under Section 4(l)(a) was available.
- Found that Rule 6 can be used only when normal price is unascertainable, which was not the case here.
- Appellants themselves admitted that when normal price under Section 4(l)(a) is available, Rule 6 should not be applied.
- Tribunal emphasized that normal price, even if determined under Rule 6, would not significantly differ from prices charged to dealers.
- Rejected the appeal, stating that normal price under Section 4(l)(a) must be adopted for all clearances, regardless of the percentage of goods sold in different markets.

5. Conclusion:
- Tribunal ruled against the appellants, emphasizing the importance of using normal price under Section 4(l)(a) for assessment.
- Did not address the issue of eligibility for Notification 201/79 as it was not raised before them or in the lower authority's order.