Valuation of processed grey fabrics failed where revenue relied on unrelated balance-sheet data and no CAS-4 mandate was shown

The valuation of processed grey fabrics was held unsustainable because it was based on balance-sheet figures from an unrelated year and on mechanical additions for freight, tax, insurance and commission. The assessee's work sheets with costing particulars were accepted, and no statutory requirement or Board guideline was shown to mandate CAS-4 certification for the period in dispute. As the lower appellate authority had already examined the record in detail and no material was produced to dislodge those findings, the Revenue's challenge to the assessable value failed and the duty demand, along with penalties, could not be sustained.

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Issues: Whether the Revenue had shown any legal infirmity in the valuation of processed grey fabrics and the consequent demand of central excise duty, including the insistence on CAS-4 certification.

Analysis: The dispute related to the assessable value of processed grey fabrics for the relevant period. The valuation adopted by the Revenue was found unsustainable because it was based on balance-sheet figures from an unrelated year and on additions made mechanically towards freight, tax, insurance and commission. The respondents had furnished work sheets with costing particulars, and the record did not show any statutory requirement or Board guideline mandating CAS-4 certificates for the period in dispute. The lower appellate authority had examined the matter in detail, and no material was shown to dislodge those findings.

Conclusion: The Revenue's challenge to the valuation failed, and the demand as well as penalties could not be sustained.

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