Captive consumption valuation upheld where cost of production and profit margin were applied, and contrary revenue material was absent.

Captively consumed synthetic organic dyes were valued by applying cost of production with an appropriate profit margin for the purpose of assessable value. The adjudicating authority used the circular-based methodology, relied on available RT-12 data for the month-wise period in dispute, and rejected the Revenue's attempt to derive the cost of concentrated dyes from the selling price of formulated dyes. As the Revenue produced no contrary material to dislodge those findings, the valuation method adopted by the adjudicating authority was upheld and the challenge failed on merits.

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Issues: Whether the assessable value of captively consumed synthetic organic dyes was correctly determined by adopting the cost of production with the appropriate margin of profit, and whether the Revenue established any error in the adjudicating authority's valuation method.

Analysis: The valuation dispute concerned goods captively consumed in the manufacture of formulations. The adjudicating authority had worked out assessable value by applying the circular-based methodology, including profit before tax and net sales, and had found that only one relevant year reflected a margin higher than the 10% already added. For the month-wise period under dispute, the authority computed the differential duty on the basis of available RT-12 data and rejected the Revenue's approach of deriving the cost of concentrated dyes from the selling price of formulated dyes. The Revenue did not produce contrary material to dislodge these findings.

Conclusion: The valuation adopted by the adjudicating authority was upheld and the Revenue's challenge failed.

Final Conclusion: The order under challenge was sustained on merits, leaving no basis for interference with the valuation determination.

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