Captive consumption valuation turns on actual sale prices and proven bulk discounts, not unsupported notional reductions.

Captively consumed rigid plastic strips were required to be valued under Rule 6(b)(i) of the Central Excise Valuation Rules by reference to the price at which similar goods were sold by the assessee or others. Where the assessee also sold the same goods in the market, that actual sale price was the proper valuation basis. A claimed bulk-purchase discount could be applied only if supported by real evidence of sales to industrial consumers in the stated quantities; in the absence of such proof, the discount remained notional. The lower authority's valuation was therefore upheld.

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Issues: Whether the valuation of captively consumed rigid plastic strips had to be based on the discounted price claimed for bulk sales, and whether that discount could be applied in the absence of proof of actual bulk purchasers.

Analysis: Under Rule 6(b)(i) of the Central Excise Valuation Rules, captively consumed goods are to be valued on the basis of the price at which similar goods are sold by the assessee or others. Where the assessee also sells the same goods in the market, the sale price of such goods provides the proper basis for valuation. A claimed discount for large-quantity purchasers can be relied on only if there is real evidence of sales to industrial consumers in the stated bulk quantities; otherwise the discount remains merely notional.

Conclusion: The discounted price was not required to be accepted for captive consumption valuation unless actual bulk buyers at that rate were shown, and the valuation adopted by the lower authority was upheld.

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