Valuation of captively consumed goods must follow open-market sale price when normal price is ascertainable.

For captively consumed clearances of identical goods to sister concerns, the assessable value had to be based on the open-market sale price to outside customers where a normal price was ascertainable. The fact that such outside sales formed only a small part of total clearances did not permit resort to an alternative valuation basis. A ministry clarification could not override the established valuation principle already applied in the assessee's own case and followed in later precedent. The outside-customer price was therefore correctly adopted, and the duty and interest demand was sustained.

---

---

Issues: Whether, for goods cleared to sister concerns for captive consumption, the sale price of identical goods sold to outside customers had to be adopted for valuation.

Analysis: The appeal turned on the valuation of watch dials and components cleared to sister units. The sale price of identical goods sold to dealers and showrooms was available, though such sales were a small percentage of total clearances. The valuation rules permitted resort to an alternative basis only when a normal price was not ascertainable. Since the goods were in fact sold in the open market and the outside-customer price satisfied the parameters of normal price, that price was required to be adopted for captively consumed clearances. The Ministry's clarification relied on by the appellant did not displace the binding valuation principle applied earlier in the appellant's own case and followed in later precedent.

Conclusion: The outside-customer sale price was correctly adopted for valuation of captively consumed goods, and the duty and interest demand were sustained.

Final Conclusion: The appeal failed on the valuation issue and the order confirming duty and interest was maintained.

Ratio Decidendi: Where identical goods are sold in the open market and the normal price is ascertainable, that price must be adopted for assessment of captively consumed clearances, even if such sales constitute only a small fraction of total clearances.

---