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TMI Blog2019 (1) TMI 1645X X X X Extracts X X X X X X X X Extracts X X X X ..... nufactured by them on site while undertaking turnkey projects challenges resort to rule 6 of the erstwhile Central Excise (Valuation) Rules, 1975 prescribing adoption of price on clearance to independent buyers, when ascertainable at the factory gate, as assessable value. 2. The first appellate authority, in the impugned order, has noted that the appellant is engaged in the manufacture of 'firefighting equipment and apparatus, spare parts and control panels and electrical parts of fire protection system' which are sold to different customers and that parts and the components are also used in turn-key projects undertaken by them at site. It is also noted that the appellant did not contest the demand for the period after 1st July 2000. Accor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the goods is not ascertainable for the reasons given in the said provision, the criteria to ascertain the price mentioned is the "nearest ascertainable equivalent thereof". This is to be determined in such manner as may be prescribed. Manner is prescribed in the Valuation Rules, 1975. Therefore, we have to consider as to which Rules of the Central Excise (Valuation) Rules, 1975 is applicable. Since there is a dispute between the applicability of Rule 4 and Rule 6, we will like to reproduce these two Rules along with Rule 3 and Rule 7 as well in order to present the complete picture. "RULE 3. The value of any excisable goods shall, for the purposes of clause (b) of sub-section (1) of Section 4 of the Act, be determined by the proper office ..... 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 assessee would have normally earned on the sale of such goods; (c) where the assessee so arranges that the excisable goods are generally not sold by him in the course of wholesale trade except to or through a related person and the value cannot be determined under clause (iii) of the proviso to clause (a) of sub-section (1) of Section 4 of the Act, the value of the goods so sold shall be determined ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... they are used captively by the appellant in the turnkey projects. We find that the only mistake which is committed by the Commissioner is to refer to Rule 6(b) inasmuch as in the present case, the goods are not consumed by the appellant/ assessee itself but used in the turnkey projects/contracts meant for the third party. Thus, it was Rule 7 which should have been referred to by the Commissioner (Appeals) as none of the preceding rules would apply. To put it otherwise, it is the case of 'best judgment assessment'. However, we find that, that is the exercise otherwise undertaken by the Commissioner (Appeals) in accepting the costing of the goods which was placed by the assessee/appellant before the assessing officer and it was taken into co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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