9911796707
TMI Blog2006 (7) TMI 44X X X X Extracts X X X X X X X X Extracts X X X X ..... Agreement dated 09.12.1996 entered into between the three Companies. That was a joint venture to manufacture basic liquid resins in India by PAPL with the technical know-how to be supplied by the Swiss Company and the basic raw material (ECH) to be supplied by the assessee. The assessee held 24% share of equity in the Joint Venture Company and the rest was held by CIBA. The assessee was the lone manufacturer of ECH in India. According to the Supply Agreement dated 22.01 .1 998 entered into between the assessee and M/s. PAPL, the entire .raw material (ECH) required by the latter had to be supplied by the former. Certain other agreements such as Plant Technology Transfer Agreement, Process Technology Transfer Agreement and Service Agreement w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3) or 110% (from 05.08.2003) of the cost of ECH production as the assessable value of the goods supplied to M/s PAPL during. such periods. These notices also demanded interest on duty under Section 11AB of the Act, apart from proposing penalties under the relevant Central Excise Rules. The demands of duty and other proposals so raised by the department were contested by the assessee. 2. The dispute between the assessee and the department came up before this Tribunal in a group of appeals, one filed by the department and two filed by the assessee. All the appeals were disposed of as per Final Order Nos. 1079-1081/2005 dated 04.08.2005 since reported in Commissioner of Central Excise, Chennai Vs. Tamil Nadu Petro Products Ltd., 2006 (7 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yer and the goods were captively consumed by him, The cost of production of the goods was far higher than its selling price to M/s. PAPL and other buyers and, therefore, it was not justifiable for the Commissioner to adopt the cost of production as the basis for determining the assessable value of the goods under Rule 9 of the Valuatio Rules. The Commissioner should have accepted the price at which the appellants had sold ECH to M/s. PAPL, as the basis for assessable value under Rule 11 of the Valuation Rules. According to learned Counsel, the adjudicating authority ought not to have applied Rules 8 and 9 at all to the case on hand. Learned SDR justified the Commissioner's order by submitting that the same was passed strictly in accordance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Tribunal had rejected the transaction value under Section 4 (1) (a) and clearly held that the valuation should be done under Section 4 (1) (b). Acting under Section 4 (1) (b), the Tribunal ruled out the applicability of the Valuation Rules 8, 9 and 10 and directed valuation under Rule 11. As rightly pointed out by learned SDR, "best judgment" is the spirit of Rule 11. The Rule required that the assessable value should be determined by using reasonable means consistent with the principles of general provisions of the Rules and sub-section 1 of Section 4 of the Act. Mention of sub-section 1of Section 4 of the Act in Rule 11 is not a licence to the assessing authority to consider acceptance of transaction value under clause (a) of the said ..... X X X X Extracts X X X X X X X X Extracts X X X X
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