Comparable goods valuation upheld for captively consumed excisable goods; cost-based method rejected on the admitted facts.

For captively consumed hydrochloric acid, where no factory-gate sale existed for the relevant quantity, assessable value had to be fixed under the captive-consumption valuation framework. The High Court accepted the Department's use of comparable sale prices of similar goods under Rule 6(b)(i) rather than a cost-based method under Rule 6(b)(ii), and found no basis to interfere under Article 226. The challenge based on earlier proceedings, alleged suppression, and the request for remand was rejected because the impugned valuation order was neither arbitrary nor without jurisdiction.

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Issues: Whether the impugned excise valuation order warranting enhancement of the assessable value of hydrochloric acid used for captive consumption called for interference under Article 226, and whether the Department was justified in adopting the comparable goods method instead of cost-based valuation.

Analysis: The petitioner's hydrochloric acid was captively consumed and there was no factory-gate sale for the relevant quantity. In such a situation, valuation had to be made under the statutory valuation framework governing captive consumption. The Court accepted that the assessee had sold similar goods at a higher price and that the Department was entitled to rely on the price of comparable goods under Rule 6(b)(i) rather than on the cost-based method under Rule 6(b)(ii). The Court also found no merit in the petitioner's challenge based on earlier proceedings, alleged suppression, or the plea that the matter should be remanded. On the admitted facts, the impugned order could not be said to be arbitrary, illegal, or lacking jurisdiction.

Conclusion: The valuation adopted by the Department was upheld and the challenge to the impugned order failed.

Final Conclusion: No interference was called for in exercise of writ jurisdiction, and the excise demand order remained undisturbed.

Ratio Decidendi: Where excisable goods are captively consumed and comparable sale prices of similar goods are available, assessable value may be determined on the basis of comparable goods under the valuation rules rather than on a self-declared cost basis.

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