Captive consumption valuation follows comparable market sale price when identical goods are sold and used internally.

Where the same goods are sold in the market and also consumed captively, their assessable value may be based on the price of comparable goods sold by the assessee under Rule 6(b)(i) of the Central Excise (Valuation) Rules, 1975. The availability of a comparable market price makes that method the proper basis for valuation, and the assessee's alternative method is not accepted on that footing. The stated principle aligns with the Supreme Court view that captive consumption should be valued by reference to comparable sale price when such a price exists.

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Issues: Whether goods captively consumed by the assessee were liable to be assessed under Rule 6(b)(i) of the Central Excise (Valuation) Rules, 1975 on the basis of the price of comparable goods sold in the market, or under Rule 6(b)(ii) on some other basis.

Analysis: The same variety of goods was admittedly sold in the market as well as consumed captively. In such a situation, the authorities below were justified in adopting the value of comparable goods sold by the assessee for determining assessable value under Rule 6(b)(i). The valuation method adopted by the assessee was not accepted because a comparable market price was available. The stated principle was consistent with the Supreme Court's view that where a comparable sale price exists, it is the proper basis for valuation of goods used for captive consumption.

Conclusion: The goods were correctly assessed under Rule 6(b)(i) of the Central Excise (Valuation) Rules, 1975, and the challenge to the valuation failed.

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