2021 (12) TMI 358 - AT - Central Excise

Valuation of goods - M S Rounds/TMT bars - classifiable under Tariff item 72131090 of the erstwhile Central Excise Tariff or not - applicability of Rule 7 or Rule 8 of Valuation Rules - HELD THAT:- Rule 7 of the Valuation Rules, 2000, will apply only where an assessee does not sell any goods to unrelated buyers at the factory gate but transfers all their goods to their consignment agents. In this regard it will be useful to examine the provisions of Rules 7 and 8 of the Valuation Rules, 2000, during the relevant period, as they use the same starting expression.

The expression “ Where the excisable goods are not sold by the assessee” came to be examined by the Larger Bench of the Tribunal in the case of ISPAT INDUSTRIES LTD. VERSUS COMMISSIONER OF C. EX., RAIGAD [2007 (2) TMI 5 - CESTAT, MUMBAI] where it was held that the assessee is correct in contending that provisions of Rule 8 would apply only in a case where its entire production of a particular commodity is captively consumed.

This decision of the Larger Bench was relied upon by the Tribunal in the case of BHARAT PETROLEUM COPRN. LTD. VERSUS COMMR. OF C. EX., CHENNAI [2009 (9) TMI 845 - CESTAT CHENNAI] to hold that Rule 7 of the Valuation Rules, 2000, which uses the same expression “ where excisable goods are not sold..”, can be invoked only where there are no sales of the goods at the factory gate and all the goods of the assessee are transferred to consignment agents. If the assessee’s excisable goods are also sold at the factory gate, Rule 7 will not apply.

Appeal allowed - decided in favor of appellant.