Captive consumption valuation follows the binding circular basis even for earlier periods, with Revenue's challenge rejected.

For captively consumed intermediate goods, valuation was held to follow the basis affirmed in the binding Board circular, and that principle was applied even for periods preceding the circular's issuance. The Tribunal accepted that the issue had already been settled by the Apex Court and upheld the assessee's valuation method, rejecting the Revenue's objection to retrospective application of the circular. No infirmity was found in not levying duty on advertisement expenses for such captive clearances.

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Issues: Whether duty on captively consumed intermediate goods was required to be assessed on CAS-4 value and whether the later Board circular could be applied to the period prior to its issuance.

Analysis: The dispute concerned the valuation of intermediate goods captively consumed by the assessee. The Tribunal noted that the issue had already been settled by the Apex Court, which held that duty is payable on the basis reflected in Board's Circular No. 692/08/2003-CX dated 13.2.2003 even for the period prior to that date. In view of that binding position, the reasoning adopted in the impugned order was found to be correct and no infirmity was found in the approach that duty was not to be levied on advertisement expenses for such captive clearances.

Conclusion: The valuation adopted by the assessee was upheld and the Revenue's objection to application of the later circular for the earlier period was rejected.

Final Conclusion: The assessee's method of valuation for captive clearances was sustained and the Revenue's challenge failed.

Ratio Decidendi: For captively consumed goods, the valuation principle affirmed by the binding circular applies even to the period preceding the circular where the legal issue has already been settled by the Apex Court.

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