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2022 (10) TMI 1076 - AT - Central ExciseValuation of goods - finished goods cleared by the appellant to their interconnected sister units at the value for charging duty appear to be transaction value as stipulated in Section 4(1)(a) of the Act - revenue neutrality - time limitation. Whether valuation of the goods cleared by the appellant to their sister units should be made under Rule 8 i.e. 110% of the cost of production or on transaction value i.e. in terms of Rule 4 of Valuation Rules read with Section 4(1)(a) of Central Excise Act? HELD THAT:- As per the facts of the case, the appellant have cleared their goods to their sister units and value of the same was determined as per the transaction value in terms of Rule 4 of Valuation Rules read with Section 4(1)(a) of Central Excise Act, 1944. The claim of the revenue is that for the clearance of goods to their own unit for the purpose of value Rule 8 shall apply and according to which the value should be arrived at by applying the price on the basis of 110% of the cost of manufacture. As of now it is settled law that in a case where the assessee sell the same goods partly to unrelated person and partly to their related person, the transaction value which is charged to unrelated buyer shall prevail and the same price shall be applicable in case of clearance of goods to the assessee’s own unit. The Rule 8 does not make it clear that in respect of same goods being cleared partly to the assessee’s own unit and partly to the unrelated buyer, whether in both cases the valuation under Rule 8 shall apply or otherwise. In view of the various judgments, it is settled law that wherever there are clearance partly to the assessee’s own unit or captive consumption and partly on sale basis, the transaction value of the sale of the goods to the unrelated person shall be applicable for assessment in case of supplies made to their own unit/captive consumption. Applying the same principal, in the present case also, the appellant have rightly paid the duty on the transaction value in terms of Rule 4 of Valuation Rules - Reliance can be placed in judgement of Hon’ble Supreme Court in COMMISSIONER VERSUS STEEL COMPLEX LTD. [2015 (10) TMI 500 - SC ORDER] wherein, the hon’ble Apex Court has given the following observation that Rule 8 of the Central Excise Valuation (Determination of Price of excisable goods) Rules 2000, which was prevailing at that time will have no application in the present case where the goods are only partly sold under ex-factory basis and partly cleared for captive consumption. For the period prior to 1st December, 2013 the valuation of the goods cleared to their sister units shall be governed by Rule 4 of the Valuation Rules whereby, the transaction value of the similar goods cleared to independent buyers shall be the assessable value for charging excise duty in respect of the goods cleared to the assessee’s own other units. In the present case also the period involved is up to November, 2013 therefore, the ratio of the above decisions is directly applicable in the present case. From the statutory changes, pre and post 01.12.2013, it is clear that prior to 01.12.2013 the Larger Bench and Hon’ble Apex court interpreting the Rule 8 prevailing at that time held that wherever part clearance is for own unit or captive use and part for independent buyers, the price charged to independent buyer should be taken as transaction value in terms of Section 4(1)(a) read with Rule 4 of Valuation Rules. The legislators keeping in mind and accepting the interpretation of valuation provision made in the judgments supra, brought an amendment in Rule 8 and the same is effective from 10.12.2013. This amendment in Rule 8 further strengthen the case of the appellant in their favour. Needless to state that the said amendment cannot be applied retrospectively. For the above reason also the contention of the revenue is not sustainable. The impugned order is not sustainable hence the same is set aside - Appeal allowed.
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