Captive consumption valuation upheld on notional profit basis, with no further interest liability where duty was already paid.

Valuation of intermediate goods captively consumed for manufacture of final products was held to be correctly based on addition of notional profit of 10%, following the Tribunal's earlier decision in the assessee's own case for the prior period. The alternative approach of adding the previous year's profit element was not accepted. As differential duty had already been paid and credit had been taken by the recipient unit, no further adverse consequence by way of interest was warranted on the impugned order. The assessee's valuation was therefore upheld and additional interest liability was not imposed.

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Issues: Whether the valuation of goods captively consumed was required to be based on a notional profit of 10% or by adding the profit element of the previous year, and whether further adverse consequences by way of interest could follow.

Analysis: The dispute concerned valuation of intermediate products captively consumed for manufacture of final products. The Tribunal followed its earlier decision in the assessee's own case for the prior period, where it had been held that addition of notional profit of 10% was sufficient. Applying the same view, the Tribunal held that the assessee had correctly valued the captively consumed goods. It also noted that differential duty had already been paid and credit had been taken by the recipient unit, and in these circumstances no further adverse consequences were warranted on the impugned order.

Conclusion: The valuation adopted by the assessee was upheld, and no further adverse consequence by way of interest was to follow.

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