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2018 (12) TMI 552 - AT - Central ExciseValuation - related party transaction - additional consideration in the clearance of ‘silico manganese’ and ‘high chrome ferro manganese’ to M/s Steel Authority of India Ltd. - Rule 8 of Central Excise Rules - Held that:- The respondent is a subsidiary of M/s Steel Authority of India Ltd; that they are related is not in doubt. Respondent is also a speciality manufacturer and, while operating as an independent manufacturer, their expertise was resorted to by the parent company on their raw materials for a process where product was to be used in the steel plant. The invoices submitted by Learned Counsel make it amply clear that the cost of conversion is not market-determined but specifically agreed upon by the two entities - the special provision of rule 8 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 to be invoked to the exclusion of all others. Rule 11, read with rule 6, of the same rules are intended to cover situations of clearances in the normal course to independent buyers and hence not applicable in the present instance. There is no allegation that the computation of value under rule 8 of Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 has ignored or excluded any includable element - Indeed, the cost of the raw material, subsumed in the ‘slag’ has, undoubtedly, been included in the computation under rule 8 and with such inclusion the discharge of duty liability on the goods cleared to the principal manufacturer incorporates the cost of the material subsumed in the ‘slag’ that has emerged during the process of manufacture. It could also be said that ‘slag’ is not a distinct product but is a remnant of the manufacturing process liable to appropriate duty on clearance as such. There is, therefore, no merit in the grounds adduced by Revenue. Appeal dismissed - decided against Revenue.
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