Excise reassessment and captive valuation rules: finalised duty liability cannot be reopened, and notional profit governs captive goods.

A finalised excise assessment could not be reopened merely because a retrospective amalgamation order and revised price lists were later filed; the earlier liability had already crystallised, so the differential duty demand was unsustainable. For captively consumed goods, assessable value had to be determined on a notional profit basis of 10%, not by importing the profit margin of the final products. Both valuation and reassessment issues were resolved in favour of the assessee, and the demand was set aside with consequential relief.

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Issues: (i) Whether differential duty could be demanded by reopening an assessment already finalised, merely because the amalgamation order operated retrospectively and revised price lists were filed for the earlier period; and (ii) whether the assessable value of captively consumed goods was to be determined by adopting a notional profit of 10% or by loading the profit percentage of the final products.

Issue (i): Whether differential duty could be demanded by reopening an assessment already finalised, merely because the amalgamation order operated retrospectively and revised price lists were filed for the earlier period.

Analysis: The assessment relating to the clearances from the job worker had already been finalised and duty had been paid. A subsequent retrospective amalgamation did not justify reopening that finalised assessment. Revised price lists filed for the retrospective period could not be used to the detriment of the assessee where the earlier liability had already crystallised.

Conclusion: The demand founded on reopening the finalised assessment was unsustainable and the issue was decided in favour of the assessee.

Issue (ii): Whether the assessable value of captively consumed goods was to be determined by adopting a notional profit of 10% or by loading the profit percentage of the final products.

Analysis: For captively consumed goods, the valuation principle applied was the notional profit basis rather than the profit margin of the final products. The adopted method required addition of notional profit of 10% for determining assessable value.

Conclusion: The assessable value had to be worked out on the basis of notional profit of 10%, and this issue was also decided in favour of the assessee.

Final Conclusion: Both disputes were resolved in favour of the assessee, with the demands set aside and consequential relief granted.

Ratio Decidendi: A finalised excise assessment cannot be reopened merely because a later retrospective amalgamation is given effect to, and captively consumed goods are to be valued on the basis of notional profit rather than the profit percentage of the final products.

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