Valuation by cost construction applies when no identical packing is available; duty stands where comparable market packing exists.

Valuation of goods cleared to a service division under the Central Excise Valuation Rules turned on comparability of packing. Where the service-division goods were packed in larger containers and no comparable goods in identical packing were available, valuation by cost construction under Rule 6(b)(ii) was upheld and the demand on that basis failed. By contrast, for Bromadiolone Cake - 0.005%, which was cleared in the same packing as the marketable product and had a comparable price, duty liability was sustained. The result was partial relief, with the bulk of the valuation dispute resolved against the Revenue but the item in identical packing remaining dutiable.

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Issues: (i) whether the value of goods cleared to the service division was correctly determined under Rule 6(b)(ii) of the Central Excise Valuation Rules, 1975 where no comparable goods in identical packing were available; (ii) whether duty was payable on the item cleared in the same packing as the marketable product, namely Bromadiolone Cake - 0.005%.

Issue (i): whether the value of goods cleared to the service division was correctly determined under Rule 6(b)(ii) of the Central Excise Valuation Rules, 1975 where no comparable goods in identical packing were available.

Analysis: The goods cleared to the service division were packed in larger containers, while the market sales were in smaller retail packs. On that basis, the goods were not comparable for valuation under the comparable-goods method. The department had not disputed the quantification of cost at the show-cause stage and had proceeded mainly on the footing that Rule 6(b)(i) applied. In the absence of comparable packing, valuation by cost construction under Rule 6(b)(ii) was upheld.

Conclusion: The valuation under Rule 6(b)(ii) was and the demand could not be sustained on that basis for the other goods; this issue was decided against the Revenue.

Issue (ii): whether duty was payable on the item cleared in the same packing as the marketable product, namely Bromadiolone Cake - 0.005%.

Analysis: For this item, the packing remained the same and comparable price was available. The respondent had already paid the differential duty on this product, and the Tribunal upheld that liability.

Conclusion: Duty on Bromadiolone Cake - 0.005% was payable and the demand on that item was sustained; this issue was decided in favour of the Revenue.

Final Conclusion: The impugned order was sustained for the bulk of the goods, but the demand was maintained for the item sold in identical packing, resulting in only a partial success for the Revenue.

Ratio Decidendi: Where no comparable goods in identical packing are available, valuation may be made on cost construction under the relevant valuation rule; but where identical packing and comparable price exist, duty liability can be sustained on that basis.

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