Valuation of DTA removals by an export-oriented unit: market price of comparable goods was rejected as the assessable-value basis.

For removals by an export-oriented unit from a domestic tariff area, market price in India was not treated as the relevant criterion for assessable value under the second proviso to Section 3 of the Central Excise Act, 1944. A valuation proposal based on comparable goods manufactured by another concern also failed because the notice did not disclose material particulars of the alleged market enquiry and the record did not support the basis for dislodging the appellate finding. The proposed differential demand was therefore not sustained.

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Issues: Whether the demand could be sustained on the basis of the market price of comparable goods and Rule 6(b)(I) of the valuation rules for removals from a domestic tariff area by an export-oriented unit.

Analysis: The notice did not disclose any material particulars of the alleged market enquiry, and the record did not show a basis to dislodge the appellate authority's finding. For valuation of removals from a domestic tariff area, the market price in India was held not to be the relevant criterion for determining assessable value under the second proviso to Section 3 of the Central Excise Act, 1944. The proposed differential demand rested on comparable goods said to have been manufactured by another concern, but that basis was not accepted as sufficient to sustain the valuation.

Conclusion: The proposed valuation and the consequential differential demands were not upheld.

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