Cum-duty valuation of captively consumed goods requires exclusion of excise duty before re-determining assessable value and duty.

In valuing captively consumed goods for central excise, a cum-duty price cannot be adopted without first excluding the excise duty element where duty is embedded in that price. The Tribunal applied the Supreme Court principle that duty must be deducted from the cum-duty consideration to arrive at the correct excisable value. The valuation of the captively consumed goods therefore required reconsideration, and the original authority was directed to re-determine value and duty afresh after giving the appellants a hearing.

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Issues: Whether, in valuing goods captively consumed for central excise purposes, the excise duty element was required to be excluded from the cum-duty price adopted for re-determination of assessable value and duty.

Analysis: The valuation adopted below proceeded on the price at which the goods were sold to consumers. The Tribunal noted the later Supreme Court ruling that where a cum-duty price is charged, the element of duty payable must be excluded while arriving at the excisable value. The valuation of the captively consumed goods therefore required reconsideration in light of that principle, followed by fresh quantification by the original authority after hearing the appellants.

Conclusion: The matter was remanded for fresh determination of value and re-quantification of duty after excluding the duty element from the cum-duty price, if applicable.

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