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TMI Blog2019 (4) TMI 640X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant is engaged in the manufacture of various iron and steel products at their integrated Steel Plant situated at Jamshedpur. In addition to clearance of their final products on payment of duty to their buyers, a part of the goods manufactured, such as, billets, ingots. TMT bars etc. were diverted for captive consumption for construction activities within the factory as well as TO their captive mines. Such clearances for captive consumption were made on payment of duty on the basis of assessable value of the goods determined in terms of Central Excise (Valuation) Rules, 2000. The appellant determined the assessable value on the basis of Rule 8 read with Provisio to Rule 9 of the Valuation Rules. This Rule provides for the determination ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lant was adopting to value for such captive consumption on the basis of value of comparable goods manufactured by the appellant and cleared to its customers. The appellant changed this valuation practice for the subsequent period on the basis of the decision of the Tribunal in the case of BOC India Ltd. Vs. CCEx., Jamshedpur reported in 2004 (168) ELT 478 (T). This decision provided for valuation on the basis of Rule 8 in case of transfer of goods to the sister unit. (ii) The ld.Sr.Advocate further submitted that the issue of valuation has since been decided against the appellant in subsequent decisions of the Tribunal. The Larger Bench of the Tribunal in the case of Ispat Industries Ltd. Vs. CCEx., Raigad reported in 2007 (209) ELT 185 (T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellant only in December, 2005 for clearance already made from June, 2004. Even after such request for provisional assessment was rejected by the Deputy Commissioner, the appellant continued to adopt the same basis of valuation in terms of Rule 8. Accordingly, he submitted that the demand may be upheld for the full period. 6. We have heard both sides at length and perused the records. 7. The issue for decision in the present case is valuation to be adopted for various goods manufactured by the appellant, but captively consumed for use within the factory as well as captive mines for various activities, such as, construction, repair and maintenance activities. The appellant cleared such goods for captive consumption after payment of duty on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tated "where excisable goods are consumed by an assessee himself or on his behalf in the manufacture of other articles" instead of preceding the above expression with the words "where the excisable goods are not sold". This view is also supported by the judgment of the jurisdictional High Court in the case of Indian Drug Manufacturers Association v. Union of India, wherein the Court held that Rule 8 applies in a situation where goods are not sold but are cleared 'exclusively' to be used in consumption or for manufacture of other articles. We also agree with the contention of the assessee that Rule 8 will apply only in two situations, (a) where the goods are consumed by him in the same factory (captive consumption) or (b) where such goods ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Rule 8, were applicable, it would only be logical to read and apply the various rules in the Central Excise Valuation Rules in a sequential manner. Though the Central Excise Valuation Rules, 2000 do not specifically prescribe such sequential application of various rules, the same, in our view, is the only reasonable way to read these rules. Any other interpretation would only lead to confusion and chaos. Since the applicability of Rule 4 is not really in dispute, there was no need to look further and regardless of the applicability or otherwise of Rule 8, the assessable value should have been determined in terms of Rule 4 of the Valuation Rules." 8. The ratio of the Larger Bench's decision has been subsequently followed by various Bench ..... X X X X Extracts X X X X X X X X Extracts X X X X
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