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of <h1>CEGAT Overturns Collector's Decision on Excise Duty Dispute</h1> <h3>GUJARAT INSECTICIDES LIMITED Versus COLLECTOR OF C. EX., BARODA</h3> GUJARAT INSECTICIDES LIMITED Versus COLLECTOR OF C. EX., BARODA - 1998 (97) E.L.T. 432 (Tribunal) Issues:1. Dispute over liability to pay excise duty on product for captive consumption.2. Applicability of Central Excise Valuation Rules for determining assessable value.3. Correctness of appellate decision regarding assessable value for captively consumed goods.4. Consideration of deductions from selling price for captively consumed goods.Analysis:The appeal before the Appellate Tribunal CEGAT, New Delhi involved a dispute regarding the liability of the appellant to pay excise duty on the product Metaphennoxy Benzaldehyde manufactured by them and partly utilized for captive consumption. The appellant had declared an assessable value of Rs. 270/- per kg for the captively consumed goods, while the department found the assessable value for the same product sold to customers to be Rs. 316/- per kg. A show cause notice was issued proposing recovery of differential duty based on this difference in declared values (para 1).The Collector (Appeals) had allowed the department's appeal, holding that the assessable value for captively consumed goods should be the same as the value for goods sold to customers in the wholesale market. However, the appellant contended that a different valuation rule should apply for captively consumed goods. The Tribunal noted that while Rule 6(b)(i) governs goods consumed in manufacturing other articles, the value should be based on the comparable goods' value produced or manufactured by the assessee or others. The appellant argued that captively consumed goods should not be valued the same as goods sold to outside buyers due to additional expenses like packing and advertisement (para 4).The Tribunal found that the Collector (Appeals) incorrectly applied Rule 4 for determining the assessable value for captively consumed goods, instead of Rule 6(b)(i). The Collector did not consider the appellant's plea regarding the difference in prices and the additional expenses incurred for goods sold to outside buyers. Therefore, the Tribunal set aside the Order-in-Appeal and remanded the matter for a fresh decision by the Commissioner (Appeals). The Commissioner was directed to consider the appellant's submissions, including reasons for claiming deductions from the selling price, and to apply the correct legal provisions in determining the assessable value for captively consumed goods (para 4).
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