1999 (1) TMI 295 - AT - Central Excise

Summary

Issues:
Revenue appeals against valuation of molasses removals to sister unit. Dispute on valuation under Central Excise Valuation Rules. Application of Rule 6(b)(i) for valuation. Contention on nearest equivalent price. Comparison of prices from South Indian Sugar Mills Association. Appeal dismissal.

Issue 1: Valuation of Molasses Removals
The Revenue appeals against the valuation of molasses removals to the sister unit, contending that the Order-in-Appeal erred in not adopting the sale price from November 1993 for the disputed period in 1994. The Revenue argues that since there were no sales during the disputed period, valuation should be done under the Central Excise Valuation Rules, specifically Rule 6(b)(i).

Issue 2: Application of Central Excise Valuation Rules
The Revenue asserts that Rule 6(b)(i) should be applied for valuation as the molasses were not sold but consumed by the assessee in the production of other articles. The contention revolves around whether the price of a previous sale from November 1993 should be considered as the nearest equivalent price under this rule.

Issue 3: Nearest Equivalent Price
The debate centers on whether the price of Rs. 2,400 per MT from the stray sale in November 1993 by the respondent should be deemed as the nearest equivalent price. The respondents argue that the price should be determined based on the compilation of prices from the South Indian Sugar Mills Association for the relevant period.

Issue 4: Comparison of Prices
The Respondents argue that the price of Rs. 500 per MT closely aligns with the average price of Rs. 567.83 from the South Indian Sugar Mills Association, specifically for public sector units. They contend that the price of private sector units should not be applied as they are a 100% State Public Sector concern.

Issue 5: Judgement
The Tribunal finds that as there were no normal sales during the disputed period, valuation cannot be determined under Section 4(1)(a) but must be done under the Central Excise Valuation Rules. Rule 6(b)(i) is deemed applicable, and the Tribunal rejects the contention that the price from November 1993 should be considered as the nearest equivalent price. The Tribunal upholds the assessable value of Rs. 500 per MT based on the South Indian Sugar Mills Association's price compilation for public sector units, dismissing the Revenue appeals.

This detailed analysis covers the key issues involved in the legal judgment, focusing on the valuation of molasses removals, the application of Central Excise Valuation Rules, the debate on the nearest equivalent price, the comparison of prices from different sectors, and the final judgment of the Tribunal.