Comparable sale price governs captive consumption valuation when normal wholesale market value is available.

Captively consumed grey yarn was not required to be valued on cost of production where the assessee sold a substantial quantity of the same yarn to independent wholesale buyers at a normal price. Because a comparable wholesale sale price was already ascertainable and those sales were undisputed, the normal price under Section 4(1)(a) of the Central Excise Act provided the proper assessable value. Resort to the valuation rules was unnecessary, and cost of production became relevant only if comparable value could not be determined. The captively consumed goods were therefore correctly assessable on the normal/comparable sale price.

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Issues: Whether the captively consumed grey yarn was required to be valued on the basis of cost of production when the assessee was also selling a substantial part of the same goods to independent wholesale buyers at a normal price.

Analysis: The assessable value for excise purposes was already ascertainable from the wholesale sale price of the same product, as the assessee had been selling a considerable portion of the grey yarn to independent purchasers and those assessments were not in dispute. Where a normal price exists under Section 4(1)(a) of the Central Excise Act, separate valuation of captively consumed goods by resort to the valuation rules is unnecessary. Even under Rule 6 of the Central Excise Valuation Rules, the primary basis is the value of comparable goods, and cost of production is reached only if comparable value cannot be determined.

Conclusion: The captively consumed grey yarn was correctly assessable at the normal/comparable sale price, and valuation on cost of production was not justified.

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