2009 (3) TMI 976

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....hereof. The said goods are chargeable to duty. The appellants are the wholly owned subsidiary of M/s Eureka Forbes Ltd. (EFL) and cleared almost their entire production to EFL and a very negligible quantity to other buyers. EPL effect sale of the aforesaid water purifiers and parts thereof to customers on retail basis. The appellants were selling their entire production of spare parts to their holding company, EFL and EFL had sold the said parts at much higher prices to the customers. After introduction of transaction value with effect from 1-7-2000, the appellants adopted the valuation based on Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000, more specifically value as calculated by costing method as provid....

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.... spare parts were used for consumption in the production or in the manufacture of another final product. We have perused our Final Order No. 1211/2007, dated 26-10-2007 [2008 (223) E.L.T. 385 (Tri.-Bang.)]. We find that the issue involved in the case before us and in the appellant's own case in Final Order dated 26-10-2007 is one and the same. We reproduce the findings in Paragraphs 4 & 5 of the above said Final Order, which are as under :- "4. We heard both sides. According to the Revenue, Rule 8 is applicable only to case where the goods are used for consumption in the production or manufacture of other articles. In the instant case EFL is not engaged in the production or manufacture of any articles. Therefore, it was argued that Ru....

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....UATION PROVISIONS INTRODUCED W.E.F. 1-7-2000 13. How will valuation of samples be done which are distributed free, as part of marketing strategy, or as gifts of donations? Since the goods are not sold Section 4(1)(a) will not apply and recourse will have to be taken to the Valuation Rules. No specific rule covers such a contingency. Except Rule 8 all the other rules cover contingencies where sale is involved in some form or the other. Therefore, the residuary Rule 11 will have to be adopted along with the spirit of Rule 8. In other words, the assessable value would be 115% of the cost of 'production or manufacture' of the goods. 5. This case is also similar to the case, which is clarified above. When there is no sale as there is no....