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TMI Blog2020 (1) TMI 375X X X X Extracts X X X X X X X X Extracts X X X X ..... running in loss or earning a 1000% profit. The valuation as per is captively consumption has to be at 110% of the cost of production. This rule was clearly openly defied by the appellant, in order to evade payment of central excise duty. The fact that their sister concern will get CENVAT Credit of duty paid has no bearing either on the excisability of the goods or on their valuation. The appellant willingly evaded payment of duty because they decided that they will pay duty only on 100% of the cost of production even though the law required them to pay on 110% of the cost of production. This is not a case where the law is ambiguous leaving it open to different interpretations but is a case of open, defiance of law. Therefore, the intenti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Shri A. K. Saini, ARs for the Respondent ORDER PER: P. V. SUBBA RAO The appellant is a manufacturer of spare parts for motor cycles and are registered with the central excise department. Their factory is located in Faridabad. The same appellant has another factory at Surajpur where the motor cycles themselves are manufactured. The appellant s factory at Faridabad transfers spare parts of motor cycles ,which they manufacture, to their factory at Surajpur. Since they are sister units, it is only a case of stock transfer and not a case of sale. Therefore, there is no transaction value under Section 4(1)(a). In other words, the goods are captively consumed by the appellant. As per Rule 8 of C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he argued that the extended period of limitation also cannot be invoked. 6. Per contra, the Ld. Departmental Representative asserts that the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000, as applicable during the relevant period, laid down very clearly that the value for the purpose of central excise duty where the goods are captively consumed shall be 110% of the cost of production. It does not matter whether the appellant was earning any profit or not. The appellant may be earning 10% profit or more than that or may be running in loss. As far as the valuation is concerned, it has to be in terms of Rule 8 of Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... profit. The valuation as per is captively consumption has to be at 110% of the cost of production. We find that this rule was clearly openly defied by the appellant, in order to evade payment of central excise duty. They have succeeded in so evading until they were caught by the department during audit. The fact that their sister concern will get CENVAT Credit of duty paid has no bearing either on the excisability of the goods or on their valuation. The appellant willingly evaded payment of duty because they decided that they will pay duty only on 100% of the cost of production even though the law required them to pay on 110% of the cost of production. This is not a case where the law is ambiguous leaving it open to different interpretatio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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