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TMI Blog2013 (12) TMI 809X X X X Extracts X X X X X X X X Extracts X X X X ..... by the respondent-assessee, M/s. Diffusion Engineers Ltd. under Rule 8 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 read with Section 4(1)(d) of the Central Excise Act, 1944 is correct in law and, therefore, the duty demands confirmed on the respondent-assessee by the adjudicating authority amounting to Rs. 5,75,750/- along with interest thereon and imposing equivalent amount of penalty under Section 11AC and additional penalty of Rs. 3,00,000/- imposed under Rule 25 of the Central Excise Rules, 2002 are not sustainable in law. 2. The facts relevant to the cases are as follows: 2.1 The respondent-assessee, M/s. Diffusion Engineers Ltd., has two units named as Unit No.1 situated at p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation Rules but should have determined the value under Rule 5 i.e., on the basis of like goods sold. It is his submission that, if one wants to avail the benefit under Rule 8, then the goods has to be used in the production/manufacture of "excisable goods" in Unit No.2. 4. The learned counsel for the respondent submits that Rule 8 of the Valuation Rules, 2000 does not envisage captive consumption for manufacture of excisable goods and uses the expression "articles". Further, the CBEC, vide Circular NO. 643/34/2002-CX dated 01/07/2002 has also clarified that if excisable goods are captively consumed, then Rule 8 shall apply and where such goods are transferred to a sister-unit, then valuation can be done under Rule 9. Rule 9, also in a situ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... actory in the repair of certain other articles. Therefore, the question of invoking Rule 5 of the Valuation Rules would not arise at all, as Rule 5 envisages sale of goods, which is not the case herein. Even if for a moment it is assumed that Rule 8 will not apply and in the absence of any specific provision under any other rules, resort will have to be made to Rule 11 which provides for using reasonable means consistent with the principles and general provisions of the Rules and sub-section (1) of Section 4 of the Act. Even if the provisions of Rule 11 are applied, the most appropriate rule will be Rule 8 and, therefore, even if it is held that Rule 8 will not apply, then even under Rule 11, the principles envisaged in Rule 8 should be fol ..... X X X X Extracts X X X X X X X X Extracts X X X X
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