2011 (6) TMI 601 - AT - Central Excise

Tribunal Upholds Valuation Rule, Dismisses Premature Appeal

Commissioner of Central Excise, Mumbai - V Versus Nirlon Ltd.

The Tribunal found that the price of comparable goods from Gujarat State Fertilizers & Chemicals Ltd. was not higher than what the respondent paid ... Captive consumption of the goods - inclusion notional profit in the assessable value – Held that:- Tribunal has categorically held that the price of comparable goods manufactured by Gujarat State Fertilizers & Chemicals Ltd. and purchased by the respondent during the relevant period was not higher than the price at which the respondent paid duty and this comparable price ought to be applied by invoking Rule 6(b)(i). Therefore, the matter was remanded back to the Commissioner (Appeals) to examine the issue, as directed. Commissioner (Appeals) has followed the direction of this Tribunal and thereafter he has arrived at a decision that the matter has to be examined by the adjudicating authority by applying Rule 6(b)(i) of the Central Excise (Valuation) Rules and to arrive at a correct assessable value. appeal is premature as the assessable value has not been ascertained till date. Revenue's appeal is rejected Issues:1. Valuation of captively consumed goods for duty payment.Detailed Analysis:The Revenue filed an appeal against an order remanding the matter to verify the respondent's records for captively consumed goods. The Revenue argued that notional profit should be included in the assessable value, citing a Supreme Court judgment. The Revenue contended that the Commissioner (Appeals) erred in considering comparable prices from a unit in Gujarat for a unit in Mumbai. The respondent, running in losses, did not add notional profit to assessable value and based their value on the previous year's balance sheet profit. The Tribunal had previously remanded the matter to consider comparable prices, which the Commissioner (Appeals) did. The Commissioner (Appeals) directed the adjudicating authority to examine if the respondent correctly valued their goods. The respondent argued the appeal was premature as the Tribunal's direction had not been challenged and had attained finality.The Tribunal found that the price of comparable goods from Gujarat State Fertilizers & Chemicals Ltd. was not higher than what the respondent paid duty, as per the previous Tribunal order. The Commissioner (Appeals) followed the Tribunal's direction to examine the issue and apply Rule 6(b)(i) for correct valuation. The Tribunal deemed the appeal premature as the assessable value was not yet ascertained. The Tribunal upheld the Commissioner (Appeals) order, stating the department had no benefit in filing the appeal. The Tribunal rejected the Revenue's appeal and disposed of the cross-objection.