Comparable goods valuation requires proven similarity in quality and attributes before captive-consumption pricing can be adopted.

Captively consumed excisable goods may be valued under Rule 6(b) of the Valuation Rules, 1975 by reference to comparable goods only when comparability in quality and relevant characteristics is proved by evidence. The price of yarn manufactured by another assessee could not be adopted as the benchmark because there was no evidence that it matched the assessee's yarn in quality or other material attributes. The Commissioner (Appeals) was found to have correctly appreciated the record, and the comparison with M/s. Abohar Mills was held unjustified, with the assessee succeeding on valuation.

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Issues: Determination of assessable value of captively consumed goods by comparison with the price of allegedly comparable yarn manufactured by another assessee.

Analysis: Rule 6(b) of the Valuation Rules, 1975 permits valuation of captively consumed excisable goods on the basis of comparable goods, but such comparison is valid only when the goods are shown to be comparable in quality and other relevant attributes. In the absence of evidence that the yarn manufactured by the assessee was of the same quality as the yarn manufactured by M/s. Abohar Mills, the price of that yarn could not be taken as the benchmark. The Commissioner (Appeals) had properly appreciated the material and no infirmity was found in that approach.

Conclusion: The comparison with the yarn of M/s. Abohar Mills was not justified and the assessee succeeded on the valuation issue.

Ratio Decidendi: Comparable goods can be used for captive-consumption valuation only when their comparability in quality and relevant characteristics is established by evidence.

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