Captive consumption valuation by comparable goods and six-month limitation under Section 11A were upheld for Revenue.

Goods captively consumed were to be valued under Rule 6(b)(i) by reference to comparable goods sold by the same assessee, and minor differences in packing, coating, testing and accessory fitting did not make the goods non-comparable where specification and quality were the same; the valuation basis was upheld in favour of Revenue. The demand was also held to be within the six-month limitation under Section 11A because the relevant date was the due date for filing the RT-12 return and the show cause notice was issued within six months of that date; the plea of time bar failed.

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Issues: (i) whether the assessable value of goods captively consumed was correctly determined on the basis of comparable goods sold by the assessee, and (ii) whether the demand was barred by limitation.

Issue (i): whether the assessable value of goods captively consumed was correctly determined on the basis of comparable goods sold by the assessee.

Analysis: The goods were manufactured by the same assessee and were both sold and captively used. The value of captively consumed goods was therefore required to be determined under Rule 6(b)(i) on the basis of comparable goods. The differences pointed out in packing, coating, testing, and fitting of accessories did not make the goods non-comparable, especially when the authority had found that both types of goods were the same in specification and quality. No evidence of packing cost was produced to justify any deduction.

Conclusion: The valuation adopted for the captively consumed goods was and the challenge failed, in favour of Revenue.

Issue (ii): whether the demand was barred by limitation.

Analysis: The demand had to be issued within six months from the relevant date under Section 11A. For the return period in question, the relevant date was the due date for filing the RT-12 return, and the show cause notice was within six months of that date. The notice was also admittedly received on 30-4-1993.

Conclusion: The demand was within limitation and the plea of time bar failed, in favour of Revenue.

Final Conclusion: The orders confirming the duty demand were sustained and the appeals were rejected.

Ratio Decidendi: Goods captively consumed are to be valued on the basis of comparable goods under the valuation rules, and a demand issued within six months from the relevant date under Section 11A is not time-barred.

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