Customs, Excise and Gold Tribunal - Delhi
Avon Tubes Ltd. vs Cce on 2 September, 2004
Equivalent citations: 2004(117)ECR616(TRI.-DELHI)
ORDER V.K. Agrawal, Member (T)
Appeal allowed.
1. The issue involved in this appeal filed by M/s. Avon Tubes Limited relates to determination of assessable value of steel tubes consumed captively by them.
2. Shri K.K. Anand, learned Advocate, submitted that the appellants manufacture steel tubes which are sold by them to independent buyers and also are used captively in their other units namely Unit No. 1 and Unit No. II for the manufacture of Bicycle parts; that the Department has confirmed the demand of duty and imposed penalty on the ground that the value has to be ascertained as 115% of the cost of manufacturer; that the Commissioner (Appeals) also under the impugned order has rejected their appeal holding that the assessable value of captively consumed goods is to be determined as per the provision of Rule 8 of Central Excise (Determination of Price of Excisable Goods) Rules 2000. The learned Advocate further submitted that Rule 8 of Central Excise Valuation Rules does not have application in respect of cases where only part quantity is transferred to other units of the same manufacturer for captive consumption; that Rule 8 is applicable only where the entire quantity is used for captive consumption; that in the present matter 60% of the production is sold to independent customers and remaining 40% of the goods are captively consumed; that in this situation the value is required to be determined by using reasonable means consistent with the principles and general provisions of the Rules and Sub-Section (1) of Section 4 of the Act. He relied upon the decision in the case of Steel Complex Limited v. CCB Calicut 2004 (61) RLT 187 (CESTAT-Ban.) : 2004 (115) ECR 859 (T) wherein it has been held when the goods were sold at factory gate to unrelated buyers and the goods were also sent to job worker for further processing; the determination of the assessable value at 115% of the cost of production was clearly unreasonable and inconsistent with the principle and general provisions of the Rules and Sub-section (1) of the Section 4 of the Central Excise Act. "The principle laid-down in the Section 4(1) of the Act is to adopt the sale price, where price is the sole consideration as the assessable value of the goods." The Tribunal has held that the ex-factory sale price is to be adopted for valuation of the goods sent to he job worker.
2. Countering the arguments Shri S.C. Pushkarna, learned JDR reiterated the findings as contained in the impugned order.
3. We have considered the submissions of both the sides. Section 4 of the Central Excise Act provides that whether the goods are sold by the assessee for delivery at the time and place of removal, the assessee and the buyer are not the related and the price is the sole consideration for the sale, the assessable value will be the transaction value. Clause B of Sub-Section (1) of Section 4 of the Act provides that in any other case, including the case where the goods are not sold, the value will be determined as per the provision of Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000. Rule 8, which has been made applicable by the Revenue, provides that "where the excisable goods are not sold by the assessee but are used for consumption by him or on his behalf in the production or manufacture of other articles, the value shall be 115% of the cost of production or manufacture of such goods." We find substance in the submission of the learned Advocate the Rule 8 is to be brought into operation where the excisable goods are not sold by the assessee. In the present matter it has not been disputed by the Revenue that almost 60% of the goods manufactured by the appellant are sold to the buyers who are not related and the price is the sole consideration. It clearly shows that the value of the goods at the place and time of removal is available and that price should be adopted for the purpose of ascertaining the assessable value of the goods which are used captively by Unit-I and Unit-II of the appellants. This was also the decision of the Appellate Tribunal in the case of Steel Complex Ltd. (supra). Thus, we set aside the impugned order and allow the appeal.
(Operative part of the order was pronounced in the open court on 2.9.2004.)