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TMI Blog2019 (4) TMI 1681X X X X Extracts X X X X X X X X Extracts X X X X ..... ted by the department, it cannot be said that they are guilty of suppression of facts. The department has not been established any ingredient for invocation of extended period. Time limitation - Held that:- It is to be seen that the clearances were made to their sister concern. The department seems to have been confused by sister concern and related undertaking. When the clearances are made to sister concern, the respondent unit would be eligible for credit and entire situation is revenue neutral one. On the score also the respondent cannot be held to be guilty of suppression of facts with intention to evade payment of duty - there is no ground to interfere with the discussions and conclusion made by the Commissioner (Appeals). Appeal dismissed - decided against Revenue. - Excise Appeal No 1233 of 2011 - A/30484/2019 - Dated:- 23-4-2019 - Ms. SULEKHA BEEVI, C.S. MEMBER (JUDICIAL) And Mr. P.V. SUBBA RAO, MEMBER (TECHNICAL) Shri AVLN Chary, Superintendent for the Appellant. Shri N.V. Ramana Rao, Consultant for the Respondent. ORDER PER: MS. SULEKHA BEEVI, C.S. 1. Brief facts are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bove circulars are erroneous. He supported the grounds stated in the appeal memo. There is no doubt that as per Rule 8 of the Valuation Rules when the excisable goods are not sold by the assessee but are captively consumed by him or on his behalf in the production or manufacture of other articles the value to be adopted is 110% of the cost of production or manufacture of such goods. As per Rule 9 of Valuation Rules where the assessee so arranges that the excisable goods are not sold by the assessee except to or through a person who is related in the manner specified, the value of the goods shall be normal transaction value at which these are sold by the related persons. Provided that in a case where the related person does not sell the goods but uses or consumes such goods in the production or manufacture of articles, the value shall be determined in the manner specified in Rule 8. The net effect is that as per the said proviso of Rule 9 also the value should be determined in the manner specified in Rule 8 of Valuation Rules 2000. However, the Rule 8 is invoked only when the clearances made by the unit fall within the scope of either Rule 8 or Rule 9 of Valuation Rules 2000. It is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eared on behalf of the respondent. The clearances under dispute are made by the respondent to their other unit namely M/s Himadri Chemicals and Industries Ltd., Kolkatta unit for captive use in the manufacture of other excisable and dutiable products. They are not two interconnected undertakings but two units of the same manufacturer. The allegation that these are related parties and interconnected undertakings is erroneous. These respondents were confused in understanding the issue wherein the show cause notice alleges that the two units are related units instead of the two units being considered of the same manufacturer. The Board s clarification has been rightly analysed by the Commissioner (Appeals) in his order which is reproduced in the order as under: Circular No. 643/34/2002-CX dated 01.07.2002. 5. How will valuation be done in cases of captive consumption (i.e consumed within the same factory) including transfer to a sister unit or another factory of the same company/firm for further use in the manufacture of goods? For captive consumption in one s own factory, valuatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers only. 5. The Learned Consultant submitted that as per para 5 of the above circular when goods are captively consumed in ones own factory, valuation has to be done as per Rule 8 of the Valuation Rules, that is; assessable value will be 115% of the cost of production of the goods. The adjudicating authority has failed to note that the specific provisions prevail over general rules. He failed to note that Rule 8 of Central Excise Valuation (Determination of Price of Excisable Goods) Rules 2000 specifically covers the situation for clearance of goods when used for consumption either by the assessee or on his behalf in the production other articles. Proviso to Rule 9 ibid also covers the situation where the goods are consumed by the related unit in the manufacture or production of goods. Rule 11, being residuary rule, is not applicable for clearances of goods to other unit for captive use in the manufacture of other goods as the value could be determined by either under Rule 8 or under proviso to Rule 9 read with Rule 8. The Additional Commissioner has erred in applying Rule 4 of the Central Excise Valuation Rules, which is not applicable to transaction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... transferred to sister unit for use in further manufacture of goods. The respondent have stated that they have adopted transaction value of the sales made to un-related buyers which are nearest time of clearance. It is also submitted that the valuation method was adopted on the basis of instructions received from the Range Officer. To support this argument they have relied upon the letter dated 24.09.2009 received from the Range Officer pursuant to which they paid the differential duty. Thus it is very much clear that the department was aware of the method of valuation adopted by the respondent in clearing the finished products. Though the Learned AR has argued that the letter was issued with regard to the another product, it can be safely concluded that the department had taken note of the fact of clearances of finished products, clearances made to sister concern as well as captive consumption of goods. Further, the entire demand has been raised on the basis of the accounts maintained by the respondent. The respondents have filed ER returns in which the clearance and value have been disclosed. All the transactions are accounted in the books; and reflected in financial statements. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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