TMI Blog2014 (12) TMI 651X X X X Extracts X X X X X X X X Extracts X X X X ..... on their behalf. I find that the appellants have tried to lay stress on the point that the goods had been consumed in another unit of the same company, hence the goods had been captively consumed. The contention of the appellants is not tenable as the words ‘captively consumed’ are used in the context to consumption within the same factory/unit and would not be applicable in cases where the goods are consumed in another factory of the appellants. It is evident from the opening sentence of the above quoted rule that these provisions are applicable only to cases where goods are not sold by an assessee except to or through a related person. Thus, the provisions of Rule 9 are applicable only if goods are sold solely through a ‘related person’, and the said provisions cannot be applied to the instant case where the goods were also sold by the appellants to independent buyers. As such, I find that the provisions of Rules 8 & 9 of the Valuation Rules are not applicable to the facts of the instant case and the clarifications issued by the Board in respect of Rules 8 & 9 of the Valuation Rules cannot be made applicable to these cases. The appellants have referred to clarification at S. N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... legal provisions and case laws. Regarding the case laws referred to by the appellants in support to their contention that the Circulars are binding on the department, I find that the appellants would not get any help from the said case laws as it is clear from the above discussion that clarification issued by the Board in the matter is in consonance with provisions of law and also with the judicial decisions on the matter and accordingly the impugned orders are upheld. - Decided against assessee. - Order-in-Appeal No. JAL-EXCUS-000-APP-291-2013-14 - - - Dated:- 22-1-2014 - Shri Anil Kumar Gupta, Commissioner (Appeals) Shri Sudeep Singh, Advocate, for the Assessee. ORDER M/s. Nector Life Sciences Ltd., Village Saidpura, Barwala Road, Derabassi (for brevity the appellants ) have filed the present appeal against Order-in-Original No. 37/AC/DB/2012, dated 25-3-2013 (for brevity the impugned order ) passed by the Assistant Commissioner, Central Excise Division, Derabassi (for brevity the adjudicating authority ). Along with the appeal the appellants have filed stay applications seeking stay on the impugned order. Accordingly, I take up both, the appeal and the stay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emical Industries - 2002 (139) E.L.T. 3 (S.C.); (iii) that the erstwhile Valuation Rules, 1975 contained mechanism for valuation of goods where goods were not sold by the assessee but consumed by him and the valuation in such cases was to be done as per Rule 6(b) of the Valuation Rules, 1975 on the basis of value of comparable goods but the provision had consciously not been continued in the Valuation Rules; that this was suggestive of the situation that the value of comparable goods was not to be made as the basis where particular lot of goods were not sold but captively consumed; (iv) that case laws of M/s. Kalyani Packaging Industries v. UOI [2004 (168) E.L.T. 145] CCE v. Ratan Melting Wire Ind. [2008 (231) E.L.T. 22 (S.C.) = 2008 (12) S.T.R. 416 (S.C.)] relied upon by the adjudicating authority were not applicable as the Hon ble Supreme Court in these cases has held that the judicial pronouncement will have preference over Board s circular only where there is either a decision of the Hon ble Supreme Court or of the jurisdictional High Court. That no decision delivered by Hon ble Supreme Court or High Court has been referred to by the department where the issue involve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts and reiterated the submissions made in their appeal as well as in additional submissions dated 12-11-2013. 5. I have carefully gone through the case records, the grounds of appeal and submissions made at the time of personal hearing. The issue to be decided is whether the value of goods cleared by the appellants to their interrelated unit/sister concern at Baddi during the material period should have been assessed under Rule 8 or Rule 4 of the Valuation Rules. As per the facts on record, the appellants had cleared goods to their sister concern (related person) and also to independent buyers during the material period and had assessed the value of the goods cleared by them to related person as per Rule 8 of the Valuation Rules. The adjudicating authority has held that valuation of goods cleared by the appellants to related person, had to be done under Rule 4 of the Valuation Rules i.e. at the price at which the identical goods were sold by the appellants to the independent buyers. 6. The appellants have contested the impugned order mainly on the ground that valuation of the goods cleared by them to their sister concern (related persons) had been done as per provisions of Ru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sold by the related person at the time of removal, to buyers (not being related person); or where such goods are not sold to such buyers, to buyers (being related person), who sells such goods in retail : Provided that in a case where the related person does not sell the goods but uses or consumes such goods in the production or manufacture of articles, the value shall be determined in the manner specified in rule 8. 6.2 It is evident from the opening sentence of the above quoted rule that these provisions are applicable only to cases where goods are not sold by an assessee except to or through a related person. Thus, the provisions of Rule 9 are applicable only if goods are sold solely through a related person , and the said provisions cannot be applied to the instant case where the goods were also sold by the appellants to independent buyers. As such, I find that the provisions of Rules 8 9 of the Valuation Rules are not applicable to the facts of the instant case and the clarifications issued by the Board in respect of Rules 8 9 of the Valuation Rules cannot be made applicable to these cases. The appellants have referred to clarification at S. No. 5 of the Board s Ci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Chemicals Industries [2002 (139) E.L.T. 3 (S.C.)]. On this point I observe that the appellants are referring to that portion of Board s Circulars which govern valuation of goods captively consumed by the assessees or captively consumed on behalf of the assessees, whereas in the instant cases the dispute is with regard to valuation of goods sold to the related person. 6.4 I observe that Valuation Rules have been formulated as a guide for the determination of value of goods which would yield a reasonable and commercial value. Rule 11 of the Valuation Rules specifically states, Value shall be determined using reasonable means consistent with the principles and general provisions of these rules and sub-section (1) of Section 4 of the Act . The principle laid down in the Section 4(1) of the Act is to adopt the sale price, where price is the sole consideration as the assessable value of the goods. I also find that in situation similar to the present cases, the Hon ble Tribunals have held that if independent sale price is available then that should be adopted as assessable value for clearance to related buyers. The Hon ble Tribunal in case of National Fertilizers Ltd. v. CCE [2009 (2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the independent buyers, is as per the relevant provisions of law and also in harmony with the above judgments of the Hon ble Tribunal on this issue. The appellants have also argued that valuation of goods sold to independent buyers depends upon the credit period involved and also needs adjustments in price due to cash or deferred payments, but this plea of the appellants has no relation with the method to be adopted for valuation of goods where similar goods are sold to independent buyers as well as to related persons. Such situations has been discussed in detail in Hon ble Tribunals judgment in the case of M/s. National Fertilizers Ltd. v. CCE [2009 (245) E.L.T. 263 (Tri. - Del.)] M/s. Lloyds Metals Engineers Ltd. v. CCE [2008 (222) E.L.T. 84 (Tri. - Mumbai)] referred to above, wherein it has categorically been held that assessable value of the goods cleared to the interconnected undertaking, if any, has to be determined based on the pricing of the comparable goods. Thus, the said conclusion of the adjudicating authority is upheld. Further, the argument of the appellants that Rule 4 of the Valuation Rules has no application in the instant case where goods have been removed to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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