Central excise valuation of sister-concern transfers must first use open-market sale prices under Rule 4, not Rule 8.

Valuation of excisable goods transferred to a sister concern must follow the sequential scheme of the Central Excise Valuation Rules, 2000. Rule 8 applies only when value cannot be determined under the preceding rules and, on its terms, where the goods are not sold by the assessee. Where identical goods are also sold in the open market, assessable value must first be worked out under Rule 4 by reference to the price of similar goods sold to independent buyers, with necessary adjustments. A departmental circular cannot override the rules, and the cited tribunal precedent on similar facts supported this approach. Rule 8 was therefore inapplicable and Rule 4 governed valuation.

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Issues: Whether valuation of excisable goods transferred to a sister concern was required to be made under Rule 8 of the Central Excise Valuation (Determination of Prices of Excisable Goods) Rules, 2000, or under Rule 4 by reference to the price of similar goods sold to independent buyers.

Analysis: The valuation rules are to be applied in sequence. Rule 8 is attracted only when the value cannot be arrived at under the preceding rules and, by its own opening words, applies where the excisable goods are not sold by the assessee. Where the assessee is also selling the same goods in the open market, the assessable value must first be worked out with reference to those sale prices under Rule 4, subject to necessary adjustments. The circular relied upon by the department could not override the scheme of the rules, and the issue was covered by the cited tribunal decision on similar facts.

Conclusion: Rule 8 was not applicable; valuation had to be made with reference to the sale price under Rule 4. The assessee succeeded on the valuation issue.

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