CAS-4 valuation for stock transfers requires proper cost exclusion; marketability objections cannot be raised for the first time on appeal.

For stock transfers of rubber compound to another unit of the same manufacturer, assessable value must be determined under the valuation rules and CAS-4 cost principles, with non-manufacturing administrative overheads and selling expenses excluded. Where the record does not clearly show that the department's cost data applied that basis, fresh computation is required. A challenge to marketability and excisability cannot be raised at the appellate stage when the original dispute and adjudication were confined to undervaluation. The valuation issue was remanded for recalculation, while the marketability objection was rejected.

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Issues: (i) Whether the assessee could dispute marketability and excisability of the rubber compound at the stage of appeal against an order proceeding only on undervaluation; (ii) whether the assessable value of goods transferred to the assessee's own unit had been correctly determined and required recalculation under CAS-4 and the valuation rules.

Issue (i): Whether the assessee could dispute marketability and excisability of the rubber compound at the stage of appeal against an order proceeding only on undervaluation.

Analysis: The dispute before the adjudicating authority was confined to undervaluation of goods cleared on stock transfer to another unit. The assessee had been classifying the product and paying duty, and the question whether the goods were marketable or non-excisable had not formed the basis of the notice or the adjudication. In such circumstances, the challenge to marketability at the appellate stage could not be entertained.

Conclusion: The marketability objection was rejected and the assessee did not succeed on this issue.

Issue (ii): Whether the assessable value of goods transferred to the assessee's own unit had been correctly determined and required recalculation under CAS-4 and the valuation rules.

Analysis: For stock transfers to another unit of the same manufacturer, valuation had to be made under the applicable valuation rules and Section 4(1)(b) of the Central Excise Act. The record did not clearly establish whether the cost data relied upon by the department excluded non-manufacturing administrative overheads and selling expenses as required under CAS-4. Since there could be no sale to self, selling expenses were not to be loaded, and the material before the Tribunal was insufficient to record a definite finding on the correctness of the cost computation. Recalculation by the Commissioner was therefore necessary.

Conclusion: The assessable value was set aside for fresh computation in accordance with CAS-4 and the valuation rules, and the assessee obtained relief on this issue.

Final Conclusion: The appeal resulted in a remand for fresh valuation, with the assessee succeeding on the reassessment question but failing on the marketability objection.

Ratio Decidendi: Where goods are transferred to a sister unit without sale, assessable value must be determined under the valuation rules on the basis of proper cost data, excluding non-manufacturing selling expenses and other inapplicable overheads, and a fresh determination is warranted where the record does not show such exclusion with certainty.

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