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2020 (1) TMI 376 - CESTAT CHANDIGARHValuation - components manufactured by the appellant and transferred to their Haridwar Plant for captive consumption in use of motorcycles and their parts - appellant valued them at 110% of cost of production under Rule 8 of Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 and also sold identical goods to independent buyers at a higher price - extended period of limitation - penalty - Board Circular No. 643/34/2002-CX dated 1-7-2002. It is a case of the revenue that where is a sale price to independent buyers, the same should be adopted even for goods which are transferred to sister units for captive consumption - It is a case of the appellant that such goods must be valued at the rate of 110% of the cost of production as per Rule 8 of Central Excise Valuation Rules regardless of fact that the identical goods were also sold to independent buyers at a higher price. HELD THAT:- After 2000, the Central Excise Valuation under Section 4 has been revised and the concept of “normal price” has been replaced with the concept of “transaction value”. In other words, with respect to each sale the value has to be determined as per the value of that transaction independent of other transactions. If the price is higher in one invoice and lower in another invoice, the valuation for these invoices would be the corresponding prices. There is no concept of uniform value for all transactions after the year, 2000. There are cases when the goods are not sold, but, are captively consumed or are sold through related buyers. Such cases are covered by the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000. The question in this case is where there is an independent sale and also captive consumption of identical goods, should the value for captive consumption be based on cost of production under Rule 8 or equal to the value of identical goods sold to independent buyers. Evidently, as they are different transactions, the values are different which should apply. This issue has also been clarified by the Board in Circular No. 643/34/2002-CX dated 1-7-2002 - Thus, not only do the Central Excise Act and Rules provide for independent valuation in respect of each clearances, even CBEC has clarified that regardless of the availability of sale price to independent buyers, the goods for captive consumption must be valued based on cost construction method, under Rule 8. The appellant did just that. Thus, there is no basis for the department’s demand of central excise duties based on the price at which identical goods are sold to independent buyers - appeal allowed - decided in favor of appellant.
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