TMI Blog2023 (5) TMI 436X X X X Extracts X X X X X X X X Extracts X X X X ..... s not a marketable product and no duty is payable. However, they have agreed to pay duty only to avoid litigation as the entire exercise is revenue neutral. They stated that Rule 8 of the Valuation Rules is not applicable in their case as all the SRGO/DHDS manufactured were not captively consumed in their factory at Haldia. Part of the SRGO/DHDS manufactured at Haldia Refinery were consumed captively for manufacture of HSD and the remaining were cleared to their sister unit at Barauni. The Appellant stated that whatever duty paid by their Haldia Unit will be availed as credit for their Barauni unit and hence the entire exercise is revenue neutral and there is no loss of revenue to the exchequer - there are merit in the argument of revenu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rauni would be eligible for the credit of the duty paid by the Haldia Unit. The above said decisions cited by the Appellant are squarely applicable in this case. The facts and circumstances of the decision in COMMR. OF C. EX. CUS., VADODARA-II VERSUS INDEOS ABS LIMITED [ 2010 (3) TMI 656 - GUJARAT HIGH COURT] are same as that of the present case on hand - it was held in the said case that The grievance was that the aspect of undervaluation has not been considered by the Tribunal at all. Grievance would have merited acceptance if the ultimate exercise would have benefited the Revenue by collection of duty in the coffers of the exchequer. In the facts of the present case, admittedly no such benefit accrues to the exchequer. The valua ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... culation method i.e. by starting from its refinery transferring price. The average profit percentage on sales of the refinery is worked out and this percentage is then deduced from the refinery transferring price of every product to arrive at the cost of the product. Accordingly they stated that they have rightly arrived at the cost of SRGO cleared to their sister at Barauni refinery and paid duty. The Appellant also raised the point of revenue neutrality and contended that whatever duty paid by Haldia unit is available as CENVAT Credit to their Barauni unit. Accordingly there is no loss of revenue to the exchequer. Thus, they argued that the demand made in the impugned order is not sustainable. 3. The Ld. Authorized Representative for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thod and paid duty accordingly, the demand made in the impugned order is sustainable. 4.1 Heard both sides and perused the relevant documents 5. We observe that SRGO manufactured by IOCL Haldia refinery has not been sold to any independent buyers. In fact the Appellant stated that it is not a marketable product and no duty is payable. However, they have agreed to pay duty only to avoid litigation as the entire exercise is revenue neutral. They stated that Rule 8 of the Valuation Rules is not applicable in their case as all the SRGO/DHDS manufactured were not captively consumed in their factory at Haldia. Part of the SRGO/DHDS manufactured at Haldia Refinery were consumed captively for manufacture of HSD and the remaining were cleared ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... opriate. 8. We find that Valuation is to be done as per Rule 8 of the Valuation Rules when the entire goods are captively consumed and there is no other method of sales involved. In this case we find that the Appellant has partly consumed the goods captively and partly cleared the same to their sister unit. The above Circular does not visualize this situation. For captive consumption Rule 8 would be applicable and for sale to their sister unit Rule 9 of the Valuation Rule 2000 would be applicable. Since none of the Valuation Rules from Rule 4 to 10A covers the above said situation, the Appellant stated that they have adopted Rule 11 Best Judgement Method . Rule 11 is adopted when the situation is not covered by any of the other methods o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... payable available as credit to own unit (sister concern) hence entire exercise revenue neutral - Grievance now that undervaluation not considered by Tribunal - HELD : Grievance acceptable if ultimate exercise benefited Revenue by collection of duty - No such benefit accrues to exchequer - Tribunal chosen not to determine academic issue - No legal infirmity in impugned order of Tribunal - Sections 4 and 11A of Central Excise Act, 1944 In view of the above discussion, we hold that the valuation adopted by the Appellant under Rule 11 of the Valuation Rules 2000 is proper and the demand confirmed in the impugned order is not sustainable and therefore set aside. Accordingly, we allow the appeal filed by the Appellant. (Dictated and pronou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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