Captive consumption valuation must use comparable manufacturers' prices, not consumer purchase prices, under excise valuation rules.

For captively consumed excisable goods, valuation under Rule 6(b)(i) of the Central Excise (Valuation) Rules must be based on comparable goods manufactured and sold by other assessees. A consumer's purchase price is not a proper benchmark because the rule requires comparison with manufacturing prices of similar goods, not prices paid in downstream transactions. The adopted valuation basis was therefore incorrect, and the matter was remanded for fresh determination using nearby manufacturers' prices for comparable molasses.

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Issues: Whether the assessable value of molasses captively consumed by the appellants could be determined by treating the price paid by a consumer as the comparable price under the valuation rules, or whether comparison had to be made with the price of molasses manufactured and sold by nearby assessees.

Analysis: The goods were not sold by the appellants but were captively consumed, so valuation had to proceed on the basis of comparable goods under Rule 6(b)(i) of the Central Excise (Valuation) Rules. The comparative benchmark adopted below was the price at which a purchasing consumer, and not a manufacturer, had obtained molasses. That was not a proper basis for comparison, because the rule required comparison with goods produced or manufactured by other assessees. The lower authorities therefore proceeded on an incorrect valuation basis.

Conclusion: The valuation adopted below was unsustainable and the matter had to be reconsidered by taking nearby manufacturers' prices for comparable molasses into account.

Final Conclusion: The impugned orders were set aside and the valuation issue was sent back for fresh determination on the correct comparative basis, resulting in relief to the appellants by way of remand.

Ratio Decidendi: For captively consumed excisable goods, comparable price under the valuation rules must be drawn from goods manufactured and sold by other assessees, not from the price paid by a consuming buyer.

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