Captive consumption valuation: conversion charges realised over controlled price were includible in assessable value.

Conversion charges realised over and above the controlled price for aluminium wire rods manufactured for captive consumption were includible in assessable value for central excise purposes. Because the goods were not sold in the open market and were used in the manufacturer's own production, valuation had to be made under the captive consumption valuation rule and the statutory concept of normal price. The additional amount realised as conversion charges formed part of the price actually received for the goods, so it was properly taken into account in determining assessable value. The challenge to exclusion of that amount therefore failed.

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Issues: Whether the extra amount realised as conversion charges in respect of aluminium wire rods manufactured for captive consumption was includible in the assessable value for central excise purposes.

Analysis: The rods were not sold in the open market but were used in the appellants' own manufacture, so valuation had to be determined with reference to the prescribed valuation rule for captive consumption and the statutory concept of normal price. The record showed that an additional amount of Rs. 805 per M.T. was realised as conversion charges over and above the controlled price. As this amount formed part of the price realised for the goods, it was properly taken into account while determining assessable value.

Conclusion: The extra conversion charges were rightly included in the assessable value, and the challenge to the valuation failed.

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