1999 (12) TMI 455 - AT - Central Excise

Assessable value of calcined alumina determined by Tribunal based on similar manufacturer's price. Duty exemption upheld despite procedural non-compliance.

The Tribunal determined the assessable value of calcined alumina transferred between factories by adopting the price charged to a similar manufacturer as ... Valuation - Class of buyers Issues Involved: Determination of assessable value of calcined alumina transferred between factories, applicability of Section 4(1)(a) and Section 4(1)(b) of Central Excise Valuation Rules, approval of price list, entitlement to duty exemption under Notification No. 217/86.Assessable Value of Calcined Alumina Transfer:The issue revolved around determining the assessable value of calcined alumina transferred between factories for aluminium production. The Department argued for using the price at which alumina was sold to independent buyers at the factory gate as the normal price for inter-plant transfer. However, the appellants contended that such sporadic sales to casual buyers did not represent wholesale trade prices. They argued for considering different prices for bulk buyers like M/s. BALCO and casual buyers. The Tribunal analyzed the sales data and concluded that the price charged to M/s. BALCO, a similar manufacturer, should be adopted as the assessable value for captively consumed alumina.Approval of Price List and Duty Demand:The appellants raised an objection regarding the approval of price list No. 2/87 and subsequent attempts by the Department to revise it with retrospective effect. Citing a Supreme Court judgment, the Tribunal held that duty cannot be demanded retrospectively based on an approved price list. The show-cause notice issued to modify the approved price list was deemed unsustainable.Entitlement to Duty Exemption:The appellants claimed duty exemption under Notification No. 217/86 for using alumina within their factories. They argued non-compliance with Chapter X procedure due to the Department's refusal to allow Modvat credit. The Tribunal found that the appellants were entitled to the duty exemption as the calcined alumina was indeed used for aluminium manufacture in their unit, despite procedural non-compliance.Conclusion:1. The price charged to M/s. BALCO was adopted as the assessable value for calcined alumina transfer.2. No duty demand was upheld regarding price list No. 2/87.3. The appellants were entitled to duty exemption under Notification No. 217/86 for the specified period.All appeals were disposed of accordingly.