Assessable value of reject yarn upheld where related-party resale and comparable yarn prices supported the declared valuation.

Assessable value for reject yarn cleared to a related unit was upheld where the first consignment's resale price to an unrelated buyer exceeded the declared value, supporting its normality, and the second consignment involved reject yarn valued only marginally below contemporaneous first-quality yarn prices, making the Revenue's objection untenable. The appellant's valuation was therefore appropriate and the challenge to the assessable value failed.

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Issues: Whether the assessable value of reject yarn cleared to a related unit was correctly adopted for central excise valuation.

Analysis: The dispute concerned two clearances of reject yarn to a related buyer. For the first consignment, the resale price realised by the related buyer from an unrelated purchaser was higher than the value adopted by the appellant, supporting the view that the declared value was normal. For the second consignment, the goods were reject yarn and the price adopted for duty was only marginally lower than the contemporaneous price of first-quality yarn, making the Revenue's objection untenable.

Conclusion: The assessable value adopted by the appellant was /appropriate and the Revenue's valuation challenge failed.

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