Captive consumption valuation of bottles must follow category-wise comparable price under excise valuation rules.

Valuation of bottles used for captive consumption under Section 4 of the Central Excises and Salt Act, 1944, with the Central Excise (Valuation) Rules, 1975, had to be made under the prescribed rules where normal price was unavailable. Rule 6(b)(i) permitted use of the value of comparable goods manufactured by the assessee or another assessee. Because the bottles differed in size and shape and the price lists showed distinct values for separate categories, valuation had to be carried out separately by class or category. Using comparable prices where the declared price was lower, and accepting the declared price where it was higher, was consistent with the valuation framework.

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Issues: Whether the valuation of different classes of bottles manufactured for captive consumption had to be determined uniformly on one basis or separately by category under the valuation rules.

Analysis: The applicable framework was Section 4 of the Central Excises and Salt Act, 1944, read with the Central Excise (Valuation) Rules, 1975. Where normal price could not be ascertained, valuation had to proceed under the prescribed rules. Rule 6(b)(i) contemplated adoption of the value of comparable goods manufactured by the assessee or any other assessee when the goods were used or consumed in manufacture. The bottles were of different sizes and shapes, and the price lists themselves showed distinct values for separate categories. The valuation exercise therefore had to be done separately for each class or category of goods, and there was nothing illegal in adopting the comparable price where the declared price was lower and accepting the declared price where it was higher.

Conclusion: The valuation method adopted by the Tribunal was valid and the challenge to it failed.

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