Valuation of captively consumed goods supported waiver of pre-deposit and stay where sale prices matched transfer prices.

Valuation of captively consumed goods under the Valuation Rules, 2000 turned on whether a prima facie case existed for waiver of pre-deposit and stay of recovery. The applicants argued that most goods were sold to independent buyers and that the transfer price to other units was broadly aligned with the price charged to such buyers, undermining the Revenue's proposed valuation under Rule 9 read with Rule 8. On that basis, the available sale price was treated as supporting interim relief, and waiver of pre-deposit of duty and penalty was granted with recovery stayed in favour of the assessee.

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Issues: Whether the applicants had made out a prima facie case for waiver of pre-deposit and stay of recovery in a dispute concerning valuation of captively consumed goods under the Valuation Rules, 2000.

Analysis: The dispute concerned valuation of goods consumed captively. The Revenue sought assessment under Rule 9 read with Rule 8 of the Valuation Rules, 2000, while the applicants relied on the fact that most of the goods were sold to independent buyers and that the transfer price to other units was broadly the same as the price charged to such buyers. On this basis, the available sale price indicated a strong prima facie case against insisting on pre-deposit at the interim stage.

Conclusion: Waiver of pre-deposit of duty and penalty was granted and recovery was stayed in favour of the assessee.

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