9911796707
TMI Blog2015 (3) TMI 1044X X X X Extracts X X X X X X X X Extracts X X X X ..... L of the Central excise Act, 1944, (hereinafter referred to as 'the Act') against the order dated 11.6.2003 passed by the Customs Excise and Gold (Control) Appellate Tribunal, West Zonal Bench at Mumbai (CEGAT). The facts in brief giving rise to the present appeal are as under: The appellant has various units and the unit in question which is known as Crown Mills Unit and the dispute pertains to this unit. It manufactures yarn which is mostly captively consumed in the manufacture of different varieties of fabrics and some yarn is sold in the market. In so far as the captive consumption of yarn is concerned, the appellant has been paying excise duty on the basis of the costs, which according to the appellant is the cost of product ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in respect of the penalty part of the order. It is not in dispute that the valuation of yarn even in case of captive consumption is governed by under Section 4(1)(b) of the Act. Section 4 is reproduced below: S.4. Valuation of excisable goods for purposes of charging of duty of Excise -(1) Where under this Act, the duty of excise is chargeable on any excisable goods with reference to their value, then, on each removal of the goods, such value shall- (a) In a case where the goods are sold by the assessee, for delivery at the time and place of the removal, the assessee and the buyer of the goods are not related and the price is the sole consideration for the sale, be the transaction value; (b) In any other case, including the case where t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... but are consumed by assessee himself, namely, in case of the captive consumption, the value of comparable goods produced or manufactured by the assessee or by any other assessee is to be taken into consideration. However, the proviso to this clause (i) of sub-rule (b) provides that in determining the value in the aforesaid sub-clause the proper officer shall make such adjustments as appear to him reasonable, taking into consideration all relevant factors, and in particular, the difference, if any, in the material characteristics of the goods to be assessed and of the comparable goods. Since the appellant itself is selling same very yarn in the open market, as per the aforesaid provision the said market value would clearly become the value ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be kept in the B.S.R. therefore, the yarn which was sold differential size duty has been paid on the differential value. Notwithstanding the same, by relying upon the judgment of this Court in question Indian Oxygen Limited vs. CCE, 1988 (36) ELT 723 (S.C.) the Tribunal dismissed the appeal of the appellant and did not even deal with the aforesaid submission of the appellant. To this extent contention of Mr. Parekh appears to be justified. We find from the record and particularly the affidavit in rejoinder filed by the appellant in the present appeal that the process of manufacture is explained by the appellant in the following manner: "(i) Yarn is spun from fibre on a spinning machine. The yarn is spun onto bobbins, which are placed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t up to the stage (iv) above, the process is common in respect of the production of the yarn whether it is to be consumed by the appellant itself or it is to be sold in the market. It is, thereafter, when it comes to process mentioned at serial nos. (v) and (vi) above, the same is necessitated for the purpose of sale in the open market and therefore costs incurred while undertaking these processes has to be excluded in arriving at the value at which excise duty is payable for the yarn domestically consumed. Our attention is drawn by the learned counsel for the Revenue to the Circular No.258/92/96-CX dated 30.10.1996 issued by the Central Board of Excise and Customs, New Delhi on the subject "Assessable value in the case of goods captively ..... X X X X Extracts X X X X X X X X Extracts X X X X
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