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TMI Blog2001 (5) TMI 95X X X X Extracts X X X X X X X X Extracts X X X X ..... uld be taken to be exceptions and the price should not be taken to be the price at which the goods are "ordinarily sold". It was claimed that the price charged by the Appellants to the outside buyer was at a deliberately high price so as to increase the cost of production of the buyers who were their competitors in the market. This high price could not be called as normal price. It was further claimed that not all webs manufactured by them were the same and that there were different qualities. The quality namely EPL 1725 which was sold to the outside buyer accounted for only 3% of the total products. That price therefore could not be applied to webs of another quality used for captive consumption. It is therefore claimed that on the subsequent clearances the price sought to be adopted was not legal. 3.The Assistant Commissioner did not discuss the various submissions made in the reply, but relying upon the following judgments he confirmed the demand :- (a)C.C.E., Madras v. Ashok Leyland Ltd. - 1987 (29) E.L.T. 530. (b)Orient Paper Mills Ltd. v. C.C.E., Nagpur - 1987 (27) E.L.T. 272 4.The assessees then filed an appeal. The argument made before the Commissioner of Central Ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the purpose of determination of duty in the following words :- Valuation of excisable goods for purposes of charging of"S.4. duty of excise. - (1) Where under this Act, the duty of excise is chargeable on any excisable goods with reference to value, such value shall, subject to the other provisions of this section, be deemed to be - the normal price thereof, that is to say, the price at which(a) such goods are ordinarily sold by the assessee to a buyer in the course of a wholesale trade for delivery at the time and place of removal, where the buyer is not a related person and that the price is the sole consideration for the sale." 9.There are certain qualifications, which are set out in the proviso (ii) and (iii) which are not relevant for purpose of this case. Where the normal price is not so ascertainable, the alternative provision reads as follows : "Section 4(1)(b) Where the normal price of such goods is not ascertainable for the reason, that such goods are not sold or for any other reason, the nearest ascertainable equivalent thereof determined in such manner as may be prescribed." 10.The prescription is in the form of the Central Excise (Valuation) Rules, 1975. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uch goods. The caution was however given in the proviso to the said rule that such price must conform with the provisions of Section 4. It is peculiar that the exception to the said rule was in harmony with Section 4 where the parent rule was not in harmony at all. 15.This rule underwent a major change in 1995. The exception to the earlier Rule became the rule made vide this amendment. Now every clearance document became a price list. In isolated cases where the clearances did not reflect the free market price given under Section 4, the necessity of filing the price list and prior approval thereof continued. 16.Section 4 was substituted with effect from 1-7-2000. The concept of "Transaction Value" was introduced and it was made the basis of the assessment and the free market condition as envisaged in earlier Section continued. The definition of "Transaction Value" also made for the inclusion therein of several aspects of expenditure incurred by the assessee during the course of manufacture, storage and sale of the goods. No case law has developed after the introduction of the "Transaction Value" and of course the period concerning the present appeal is earlier. 17.What the an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... change in the price, the same price as declared was determined to rule throughout the period of price list so filed, then it is in consequence to hold that as long as the price for the same is available, that value will continue to rule for the clearances made for captive consumption. Therefore until there is another sale and if that sale is at a different price then that later price will become the price for calculation of duty on captive consumption of the goods thereafter. 21.It could be argued that this could prove to be an incentive for the assessees to artificially manipulate their price. But this fear would be unfounded. Where such price is shown to be in confirmity with all the provisions of Section 4 that is where the sale is at arms length and the relationship is on the principal to principal basis, then the Department may not challenge the basis of calculation of duty for captive consumption made on that basis. 22.Where such conditions existed the assessee could not at a later date claim that a particular sale price was not reflective of the market sentiment. Dr. Mishra had claimed that in the solitary instance where goods were sold the value was artificially high. I ..... X X X X Extracts X X X X X X X X Extracts X X X X
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