TMI Blog2020 (1) TMI 757X X X X Extracts X X X X X X X X Extracts X X X X ..... owever this dispute has been resolved by the Larger Bench of this tribunal in the case of IISPAT INDUSTRIES LTD. VERSUS COMMISSIONER OF C. EX., RAIGAD [ 2007 (2) TMI 5 - CESTAT, MUMBAI] according to which even though goods were not sold and used captively, the valuation of such goods shall be on the basis of the Sale Price of such goods sold to the independent buyers. There is no specific character of the waste and scrap mentioned in the description, either in case of captive consumption or in the case of waste and scrap sold to independent customer. Therefore, merely on the description which does not give the actual character of the scrap, it cannot be said that the scrap sold to independent customer is different from waste and scrap captively consumed. Therefore, the conclusion of the Adjudicating Authority that both types of clearances are of different waste and scrap is not tenable - the appellant has correctly valued the goods in conformation to the Larger Bench judgment in the case of Ispat Industries Ltd. Time Limitation - HELD THAT:- The fact of sale of waste and scrap and captive consumption for further manufacture of reprocessed granules and use thereof in the manu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... half of the appellant submits that even though the waste and scrap was captively consumed but part of the same waste and scrap is sold on Principle to Principle basis to the independent customer, price charged to the said customer shall be the assessable value even in case of captive consumption. In this regard he placed reliance on the various following judgments. Ispat Industries Ltd v CCE-2007 (209) ELT 185 (LB) Vinati Organics Ltd V CCE 2018- TIOL-26-CESTAT-MUM Handy Wires Ltd v CCE-2015 (329)ELT 169 3. He further submits that Commissioner has traveled beyond the Show Cause Notice by holding that waste and scrap cleared to an independent buyers was not comparable to the waste and scrap captively consumed. He submits that the Show Cause Notice has in clear terms accepted that the value of captively consumed waste/scrap which was worked out and the price at which such goods were sold to independent buyers. The Show Cause Notice has therefore accepted that waste/scrap which was captively consumed was the same as that sold to independent buyers and there is no allegation in the notice that the waste/scrap sold to independent buyers was not comparable to the waste/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Learned Additional Commissioner (Authorized Representative) appearing on behalf of the revenue reiterates the finding of the impugned order. 7. We have carefully considered the submissions made by both the sides and perused the record. We find that the issue to be decided is that what should be the valuation of the waste and scrap used captively for Manufacture of exempted reprocessed granules. Whether the valuation should be done in terms of Rule 8 of Central Excise Valuation Rules that is on Cost Construction Method or on the comparable value of waste and scrap sold to independent customer on Principle to Principle basis. We find that the Adjudicating Authority held that the valuation of captively consumed waste and scrap should be on the basis of Cost Construction method mainly for the reason that the waste and scrap sold to independent customer is different from the Waste and Scrap consumed captively. Therefore, the Learned Adjudicating Authority did not accept that the sale price of waste and scrap charged to independent customer should be applied in the case of captive consumption. 8. The Learned Counsel vehemently argued that the nature of the scrap whether it is diffe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Adjudicating Authority relied upon the invoices issued for captive consumption and for sale of the goods and the comparative chart was prepared which is reproduced on Page No.13 14 of the impugned order. The same is scanned below. Sr. No. Invoice No. Date Description Captive Consumption or for sale Remark on Inv. if for captive consumption Qty. (KGS.) Price/unit Rs. 1. 0068/16.04.2003 waste-scrap of plastic Captive FOR CAPTIVE CONSUMPTION 3000 23 2. 0062/14.04.2003 End waste- Transparent sale to customers not applicable 990 22 End waste-White not applicable 3730 17 3. 00625/18.06.2003 waste- scrap of plastic Captive waste to RPG for rpg sale to ext customer 3500 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xt customer 3600 30.53 14. 1984/17.12.2004 End waste -White sale to customers not applicable 4920 27.75 12. On going through the above chart we find that there is no specific character of the waste and scrap mentioned in the description, either in case of captive consumption or in the case of waste and scrap sold to independent customer. Therefore, merely on the description which does not give the actual character of the scrap, it cannot be said that the scrap sold to independent customer is different from waste and scrap captively consumed. Therefore, the conclusion of the Adjudicating Authority that both types of clearances are of different waste and scrap is not tenable. We find that the appellant has correctly valued the goods in conformation to the Larger Bench judgment in the case of Ispat Industries Ltd. The relevant order is reproduced below. 5. We have considered the rival submissions and are of the view that the assessee is correct in contending that provisions of Rule 8 would apply only in a case where its en ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he ground that the said rule is inapplicable to the present case but on the ground that a more specific provision in Rule 8 is available to enable determination of the assessable value. As discussed above, the provisions of Rule 8, in our view, are not applicable to the present case and therefore the value determined by the assessee under Rule 4 deserves acceptance. 7. We also agree with the submission of the assessee that even if both the rules, i.e. Rule 4 and 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 conclusion that we are drawing in the present case would lea ..... X X X X Extracts X X X X X X X X Extracts X X X X
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