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1. M/s. Essel Packaging Limited, the Appellants, manufactured Multilayer Plastic Laminated Tubes. The input namely Multilayer Plastic Laminated Web was also manufactured by them which was cleared for captive consumption on cost construction basis as per Rule 6(b)(2) of the Central Excise (Valuation) Rules 1975. The declared prices range between Rs.77/- Rs.112/-. However, during June 1997 some clearances were made to a buyer for Rs.233/- per Kg. A show Cause Notice was issued seeking application of this price to the clearances made for captive consumption. Differential duty was demanded on all clearances made immediately after the sales made to the outside buyer on 30.6.97.

5. We have heard Dr. D.M. Mishra, Advocate for the Appellants and Smt. Arya for the Revenue.

6. Dr. Mishra emphasised the aspect of the time frame incorporated in to the law of Valuation as also the qualifications of the goods. He emphasised that for the sake of comparison also the goods must be the same and the application of price of goods sold to the outside buyer for captive consumption can only be for a short period and the said sale price cannot continue unconditionally for application into captive consumption. He submitted that Rule 6(b)(1) will not apply even with due correction. He urged that the solitary instance where the goods are sold to outside party should be disregarded entirely for determination of the valuation for captive consumption and that such captive consumption should be therefore always on the basis of cost construction.

19. Prima facie therefore there would be no objection to the department for adopting the price at which the goods were sold to the outside buyer. Dr. Mishra has two objections. The first is that a solitary sale cannot become a guideline; and the second is that the variety of goods was different in the case of captive consumption and in the case of outside sale.

20. Rule 6(b) of the Central Excise (Valuation) Rules 1975 provides two methods of such valuation. The first is where comparable goods are sold. Then that value can be adopted after making proper adjustments. The second is the cost construction method. The Rules do not speak of the situation where some goods are sold as well as are used for captive consumption. This lacuna was overcome by in the Judgements referred to above. Therefore, once such price is determined for the outside sale is available, then that price becomes the price for calculation of duty for captive consumption. It is not necessary that such sales to outside parties should be made on a number of occasions. Even a solitary sale is sufficient to establish the valuation. We have in the earlier part of our analysis observed that the principle of dynamism available in Section 4 was in conflict with provisions of Rule 173C. If in spite of continuous 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.

25. For determination of this point, the proceedings will have to be remanded to the Jurisdictional Officer. He will adopt the price of captive consumption first verifying as to which variety is used for captive consumption and then if the particular variety is sold in the outside market he will adopt that price. As regards the other variety, he shall first determine where the value thereof for the captive consumption could be determined on the basis provided in clause 1(b) of Rule 6 for which he will have to determine whether various prices enumerated in the price list are "comparable" to each other. He may have some difficulty in making this analysis. The Central Excise Law does not define the comparable goods. Section 4 as it existed on 1.10.75 spoke of "articles of the like kind and quality". The Customs Valuation Rules 1988 speak of "identical goods" and "similar goods". The Rules also define these terms. These definitions are not of use in defining the Central Excise phrase "comparable goods".