Captive consumption valuation permits interest inclusion in assessable value; loss-making status and prior lower addition did not displace demand.

Rule 8 of the Central Excise Valuation Rules governs captive consumption valuation, and the inclusion of interest in the assessable value of processed fabrics was treated as prima facie valid. A plea that the unit's loss-making position prevented addition of interest was found untenable on the face of the rule. The further contention that a lower 1.9% interest addition had already been made was also rejected because the effective declaration from 1-7-2001 did not specify any additional interest at any rate. On that basis, waiver of the entire pre-deposit was declined and deposit of the duty amount was directed.

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Issues: Whether the appellant was entitled to waiver of pre-deposit of duty in a case where interest was added to the assessable value of processed fabrics under Rule 8 of the valuation rules, and whether the earlier addition of a lower interest percentage displaced the demand.

Analysis: The duty demand arose from inclusion of interest at 5.13% in the assessable value for processed fabrics cleared during the relevant period. The plea that interest could not be added because the unit was suffering losses was found prima facie untenable in the light of Rule 8 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 governing captive consumption. The further plea that interest had already been added at 1.9% was also found prima facie unacceptable because the declaration effective from 1-7-2001 did not mention any additional interest at any rate.

Conclusion: The appellant was not entitled to waiver of the entire pre-deposit and was directed to deposit the duty amount.

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