Captive-consumption valuation dispute: remand for a fresh cost audit beyond the appealed period was held unsustainable.

Captive-consumption valuation of slurry and naphtha on a cost-construction basis was examined in the context of a remand order. The record indicated that the assessee had repeatedly sought the cost audit report, that it was not supplied, and that the original authority had accepted price lists supported by Chartered Accountant certificates. The remand was unsustainable because it extended beyond the Department's grievance by directing a fresh special cost audit for a later period, even though the relevant period was earlier and the factory had closed, and because it did not address other valuation issues or give reasons for requiring another audit. The assessee succeeded.

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Issues: Whether the remand order directing a fresh special cost audit for a later period, instead of confining the examination to the Department's grievance regarding the existing cost audit report, was sustainable.

Analysis: The valuation dispute concerned captively consumed slurry and naphtha assessed on cost construction basis under the valuation rules. The record showed that the assessee had sought the cost audit report repeatedly but it was not furnished, and the original authority had accepted the price lists supported by Chartered Accountant's certificates. The remand order travelled beyond the Department's appeal by directing a fresh special audit for a subsequent period, although the relevant period was earlier and the factory had already closed. The order also failed to deal with other valuation issues raised in the appeal and gave no reason for ordering a further audit.

Conclusion: The remand direction was unsustainable and the assessee succeeded.

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