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TMI Blog2004 (7) TMI 518X X X X Extracts X X X X X X X X Extracts X X X X ..... h Liquor was exempt from payment of duty and consequently the appellants were liable to pay duty on Caustic Soda Lye, which they had captively consumed in the manufacture of Bleach Liquor. During such period, they had cleared a part of their Caustic Soda Lye production, for home consumption also. About 75% of such clearance was made to M/s. SIV Industries at a price (Rs. 6,534/- per MT) agreed between them. The rest of the clearances for home consumption were to other buyers at other rates agreed between the appellants and the buyers. Initially, for the purpose of paying duty on the Caustic Soda Lye cleared for captive consumption, the appellants were determining the assessable value of the goods by the Cost Construction Method in terms of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y against the assessee and imposed on them a penalty of Rs. 40,000/-. Hence this appeal. 2. Heard both sides and considered their submissions. Under Rule 6(b)(i) of the Central Excise Valuation Rules, where excisable goods are captively consumed in the manufacture of other articles, the value of such goods shall be based on the value of comparable goods manufactured by the assessee or by any other assessee. As per Rule 6(b)(ii), valuation of the captively consumed goods shall be done on the basis of the cost of its production, only if the value cannot be determined under Rule 6(b)(i) as noted by this Tribunal in the case of Universal Glass Ltd. v. CCE, Meerut [2000 (124) E.L.T. 457] cited by ld. Counsel. In the instant case, there is no d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the goods to be assessed. It was certainly possible for the Commissioner to do this under Rule 6(b)(i) and hence there was no question of going in for the Cost Construction Method under Rule 6(b)(ii). Ld. Commissioner took the view that adjustments in terms of Rule 6(b)(i) were not possible in respect of prices of comparable goods sold by the assessee to independent buyers under independent sale contracts. We are unable to endorse this view as what Rule 6(b)(i) requires is a price of comparable goods. The rule does not debar a negotiated and agreed price of comparable goods from being subjected to adjustments for arriving at a value for the goods captively consumed by the assessee. 3. We find that the appellants have a stronger case on l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he captively consumed goods in terms of Rule 6(b)(i). The appellants also wrote a similar letter to the Central Excise Range Officer on 30-12-1994. In May 95, the appellants submitted Profit and Loss Account and Balance Sheet and furnished other information as required by the Range Officer in this connection. They also furnished the Purchase Order of M/s. SIV Industries to the authorities. These facts, stated in the memo of appeal, have not been disputed. Going by these facts, we find that the department was well aware of the manner in which the appellants were determining the assessable value of the Caustic Soda Lye cleared for captive consumption. In their letter dated 16-11-1994, the appellants, in clear and unambiguous terms, wrote to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng our details of working for arriving at the value. We request you to kindly take note of the same. The above letter disclosed the assessable value of the captively consumed Caustic Soda Lye to the Department for purposes of Rule 6(b)(i). All the facts relevant to valuation under this rule were furnished in the letter. 4. Even thereafter, the department took about 11 months to issue the show cause notice (dated 21-10-1995) demanding duty on the goods cleared for captive consumption during Mar. 94 to Mar. 95. The entire demand is beyond the normal period of 6 months. The larger period prescribed under the proviso to Section 11A(1) is not invocable in this case for want of suppression of facts by the assessee. The demand of duty is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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