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2018 (4) TMI 223 - AT - Central ExciseValuation - Cement - captive consumption - Department was of the view that the duty was required to be paid on such captively consumed goods on the basis of transaction value of cement cleared to independent buyers in terms of Section 4 of the Central Excise Act - Held that - Rule 8 of the Central Excise Valuation Rules has been amended w.e.f. 1/12/2013. After such amendment the Rule provides for determination of value of captively consumed goods, on the basis of 110 per cent of the cost of production or manufacture of such goods - demand set aside. Demand for the period prior to 1/12/2013 - Held that - similar issue for period prior to 1/12/2013 has come up before the Tribunal in the case of CCE, Indore V/s Surya Roshni Ltd 2016 (10) TMI 1137 - CESTAT, NEW DELHI in which Tribunal has held that the treatment for the period prior to amendment to Rule 8 is to be the same as for the treatment after such amendment - demand set aside. Appeal allowed - decided in favor of appellant.
Issues:
- Dispute over Central Excise duty payment for cement captively consumed within the factory. - Applicability of Rule 8 of the Central Excise Valuation Rules. - Differential duty demanded for the period before and after the amendment to Rule 8. Analysis: 1. The appellant, engaged in cement manufacturing, paid duty on captively consumed cement based on cost of production plus 10%. The Department demanded differential duty of ?46,85,281, contending it should be based on transaction value to independent buyers. Both authorities upheld this view, leading to the appeal against Order-in-Appeal No. 257/2017-18. 2. Post-amendment to Rule 8 in 2013, the duty paid by the appellant was deemed correct for the period after 01/12/2013. The Rule now specifies determining value of captively consumed goods at 110% of production cost. Thus, the differential duty demanded for this period was set aside. 3. For the period pre-amendment, the Tribunal's decision in a similar case highlighted the valuation issue of goods cleared to a sister unit. The appellant argued for valuation based on 110% of production cost, citing Circular No. 634/34/2002-CX and Rule 8. The Tribunal noted the substitution of Rule 8 in 2013 and clarified its application regardless of the extent of clearances. The decision in CCE, Mumbai vs. Fiat India Pvt. Ltd. emphasized flexibility in determining assessable value under different circumstances. 4. The Tribunal dismissed the Revenue's appeal, affirming the lower authority's findings. It concluded that the treatment of captively consumed goods should be consistent irrespective of the rule amendment. Consequently, the impugned order was set aside, and the appeal was allowed.
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