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2013 (6) TMI 4 - AT - Central ExciseUnder valuation of the goods - whether the goods manufactured by the M/s. Abhishri in terms of agreement entered with M/s. Symphony and cleared to godown of latter during the period November 2009 to March 2011 needs to be valued for the purpose of assessment of duty in terms of Rule 10A of the Valuation Rules, 2000 or Section 4(1)(a) of the Central Excise Act, 1944 as done by M/s. Abhishri - Held that:- There is no dispute as to the fact that M/s. Symphony had supplied moulds to M/s. Abhishri for manufacturing of Air Coolers. Non-inclusion of the amortized cost of such moulds, in the value of Air Coolers sold by M/s. Abhishri to M/s. Symphony, would, at the most require redetermination of value, read with provisions of Rule 6 of Valuation Rules, which talks about determination of correct value, even for the transaction falling under the ambit of Section 4(1)(a) of Central Excise Act, 1944. When apply the said rules, it is found that the provisions of Rule 6 would apply in this case as the said provisions very clearly indicate that the cost of the free supply of moulds needs to be included in the transaction value, for the discharge of duty liability. See case of ISPAT Industries Limited [2007 (2) TMI 5 - CESTAT, MUMBAI]. The said cost of moulds has to be amortized and included in the value of goods manufactured and cleared by M/s. Abhishri. We find that the application of Valuation Rules, 2000 need to be done in sequential manner and specific Rule needs to be applied. Thus by applying such norm, rule 6 of the Valuation Rules should the correct Rule, as it is more specific rule than the Rule 10A, for the purpose of valuation of the goods manufactured and cleared by M/s. Abhishri as invoking the provisions of Rule 10A of the Valuation Rules in this case, does not arise. Thus if any assessee manufacture final products, independently procuring inputs, paying for the same, utilizing his own manpower and sells the finished products to a purchaser based upon the price agreed between them, the said transaction will be covered by Section 4(1)(a) of the Central Excise Act, 1944. Trying to bring such type of transactions under provisions of Rule 10A of Valuation Rules, is not in consonance with the settled law, even if the finished products are sold at higher price by the buyer.
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