TMI Blog2015 (3) TMI 1044X X X X Extracts X X X X X X X X Extracts X X X X ..... like this, the value has to be determined in such a manner as may be prescribed. This manner is prescribed in Rule 6 (b)(i) of the Central Excise (Valuation) Rules, 1975. A bare reading of Rule 6(b) manifestly points out that in those cases where the excisable goods are not sold by the assessee but are consumed by assessee himself, namely, in case of the captive consumption, the value of comparable goods produced or manufactured by the assessee or by any other assessee is to be taken into consideration. However, the proviso to this clause (i) of sub-rule (b) provides that in determining the value in the aforesaid sub-clause the proper officer shall make such adjustments as appear to him reasonable, taking into consideration all relevant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2015 - A. K. Sikri And Rohinton Fali Nariman,JJ. For the Appellants : Mr P H Parekh, Sr Adv. Mr E R Kumar, Adv. Mr Vishal Prasad, Adv. Mr Utsav Trivedi, Adv. Ms Sanjana Ramachandran, Adv. Mr Aditya Sharma, Adv. M/s Parekh Co For the Respondents : Mr yashank Adiyaru, Sr. Adv. Mrs Shirin Khajuria, Adv. Mr Rajiv Nanda, Adv. Mr Ajay Sharma, Adv. Mr B K Prasad, Adv. Mrs Anil Katiyar, Adv. JUDGMENT A. K. Sikri,J. This appeal is preferred by the appellant/Assessee under Section 35-L of the Central excise Act, 1944, (hereinafter referred to as 'the Act') against the order dated 11.6.2003 passed by the Customs Excise and Gold (Control) Appellate Tribunal, West Zonal Bench at Mumbai (CEGAT). The facts in brief giv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peals), a demand in the sum of ₹ 39,24,324.29 was raised and confirmed and equal amount of penalty was also imposed. Feeling aggrieved by the said order, the appellant preferred the appeal before the CEGAT. By the impugned judgment and order CEGAT has affirmed the order of the Commissioner (Appeals), resulting into the dismissal of the appeal in so far as payment of excise duty is concerned. However, in so far as penalty is concerned, the same is reduced to rupees five lakhs thereby giving partial relief in respect of the penalty part of the order. It is not in dispute that the valuation of yarn even in case of captive consumption is governed by under Section 4(1)(b) of the Act. Section 4 is reproduced below: S.4. Valuation o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppear to him reasonable, taking into consideration all relevant factors and, in particular, the difference, if any, in the material characteristics of the goods to be assessed and of the comparable goods. (ii) if the value cannot be determined under sub-clause (i), on the cost of production or manufacture, including profits, if any, which the assesee would have normally earned on the sale of such goods. A bare reading of Rule 6(b) manifestly points out that in those cases where the excisable goods are not sold by the assessee but are consumed by assessee himself, namely, in case of the captive consumption, the value of comparable goods produced or manufactured by the assessee or by any other assessee is to be taken into consideration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es of winding and warping, etc. should be included in the value as yarn is clearly for captive consumption before sizing etc. at the spindle stage. This is so specifically noted by the CEGAT in the impugned order as well by pointing out that the appellant initially declared the value of the manufactured cotton yarn on the basis of the manufacturing cost, the cost of marketable yarn, however, was higher than that. Since this calculating cost of marketable yarn has to undergo the process of wharfing, coning, packing etc, and the goods have to be kept in the B.S.R. therefore, the yarn which was sold differential size duty has been paid on the differential value. Notwithstanding the same, by relying upon the judgment of this Court in question I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d on cones. The yarn may be thereafter sized or unsized depending upon the order. These cones are thereafter packed in polythene bags which are repacked in corrugated boxes, which are tied with plastic straps or packed in hessian bags. It does becomes apparent that the appellant is entitled to adjustment of the costs which are incurred in the sale of the same product in the open market as that cannot be included in the cost in respect of yarn which to be captively consumed. From the aforesaid process explained by the appellant itself it is clear that up to the stage (iv) above, the process is common in respect of the production of the yarn whether it is to be consumed by the appellant itself or it is to be sold in the market. It is, t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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