TMI Blog2008 (11) TMI 261X X X X Extracts X X X X X X X X Extracts X X X X ..... on No. 45/2000-C.E. (N.T.), dated 30-6-2000, effective from 1st July, 2000. Therefore, the value of goods captively consumed has to be determined, when the price is not the sole consideration for sale, in accordance with Rule 8 of the Central Excise (Valuation) Rules, 2000, with effect from 1-7-2000. In such circumstances, the writ petitions preferred by the petitioners are unsustainable, as they are devoid of merits. In view of the limited prayer made on behalf of the petitioners it is observed that it goes without saying that the authorities concerned would take note of the Circular and the decision of the Larger Bench cited supra before deciding the issues arising for consideration, if they are found to be applicable at the relevant p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r yarn captively used for knitting on the cost plus profit, if any, of the industrial unit. After the impugned amendment, the duty is imposed on the yarn which is not sold on the basis of the cost of production plus a notional 15% gross profit to arrive at the assessable value. There is a huge disparity between the transaction value of sales and the transaction value arrived at on notional basis. Therefore, the petitioner has not been in a position to remit the duty on the deemed gross profit to arrive at the notional value. It makes the marketing of the product uneconomic. 5. It has been further stated that the provisions of the Act impose a duty of excise taking the value as determined, under Section 4 of the Act. Under Section 4, as it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anner as may be prescribed. By Notification No. 45/2000-C.E. (N.T), dated 30-6-2000, the Central Excise (Valuation) Rules, 1975, were recast by the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000. The expression 'normal transaction value' was defined as the value at which the greatest aggregate quantity of goods are sold. Rule 8 of the said Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000, issued under the said Notification No. 45/2000-C.E. (N.T.), dated 30-6-2000, under which the assessments of the petitioners are completed for captive consumption, and which is challenged in the present writ petition, reads as follows : "Rule 8 : Where the excisable goods are not sold by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0-6-2000, is admittedly in exercise of the powers under Section 37 of the Act and therefore, it cannot go beyond the powers conferred. 8. It has been further stated that the impugned rule introduces an arbitrary value in respect of the goods not sold. The 15% taken as profit, irrespective of the nature of the industry, the period during which the goods are manufactured and the transaction value as available in the market, is arbitrary and violative of Article 14 of the Constitution of India. Further, the impugned Rule 8, suffers from the vice of hostile discrimination in dealing with unequal situations equally and there is a failure to classify. The impugned Rule ignores the fact that the profit can only be the manufacturing profit and no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not related and the price is the sole consideration for the sale, the transaction value as per Section 4(1)(b) in any other case, including the case where the goods are not sold, would be the value determined in such manner as may be prescribed, under the Central Excise (Valuation) Rules, 2000. 11. Section 37 of the Central Excise Act, is an empowering Section under which the Central Government has the power to make Rules to carry into effect the purposes of the Act which may provide determining value under Section 4 and Section 37(2)(i) is a subject category on which Rules may be framed to provide for determining the value. Accordingly, the Central Government, by virtue of Section 37 of the Central Excise Act, 1944, has made the Central ..... X X X X Extracts X X X X X X X X Extracts X X X X
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