Central Excise valuation under Rule 7 applies only when goods are not sold at removal; Rule 4 governs direct sales.

Rule 7 of the Central Excise Valuation Rules, 2000 applies only where excisable goods are not sold at the time and place of removal and are instead transferred to a depot, consignment agent's premises or another place for sale. Where sales also occur at the point of removal, valuation must be determined under Rule 4. On that basis, dealer's commission and delivery charges could not be added under Rule 7, and the assessee's adopted assessable value was required to be accepted. The duty demand and consequential penalties were therefore not sustainable.

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Issues: Whether Rule 7 of the Central Excise Valuation Rules, 2000 applied to the removal of motor spirit and high speed diesel oil from the assessee's installation and their subsequent sale from own outlets, and whether the dealer's commission and delivery charges were includible in assessable value.

Analysis: Rule 7 applies where excisable goods are not sold at the time and place of removal but are transferred to a depot, consignment agent's premises, or any other place from where they are sold. Here, the goods were also sold to customers at the time and place of removal. The Tribunal followed the Larger Bench ruling that where part of the production is sold independently and the valuation is otherwise determined under Rule 4, Rule 7 is not attracted. On that basis, the assessable value adopted by the assessee could not be displaced by adding the dealer's commission and delivery charges under Rule 7.

Conclusion: Rule 7 was not applicable, and the valuation adopted by the assessee under Rule 4 was required to be accepted. The duty demand and consequential penalties were not sustainable.

Ratio Decidendi: Rule 7 of the Central Excise Valuation Rules, 2000 applies only when excisable goods are not sold at the time and place of removal and are instead transferred for sale from another premises; where sales also take place at the point of removal, valuation must be determined under Rule 4.

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