2008 (11) TMI 261

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....l Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000, notified under Notification No. 45/2000-C.E. (N.T.), dated 30-6-2000, ultra vires Section 4(1)(b) and Section 37(2)(i) of the Central Excise Act, 1944, and unenforceable as ultra vires Articles 14 and 19(1)(g) and Articles 265 and 300-A of the Constitution of India. 4. It has been stated that under the provisions of the Central Excise Act, 1944, the duty of Excise is levied, as per Section 4 of the Act. The excise duty is imposed on the transaction value, namely, the price at which goods are sold in the course of wholesale sale to an unrelated person. On the sale of cotton yarn, the petitioner Mill has been remitting duty on the actual selling price, which is the....

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....e assessment, the Central Excise (Valuation) Rules, 1975, made under Section 37 of the Act, provided for determination of matters, under Section 4(1)(b) of the Act. Rule 6(b)(ii) was always resorted to assess goods manufactured in-house and captively consumed within the factory for which there was no normal price. Rule 6(b)(ii), during the relevant period, read as follows : "if the value cannot be determined under sub-Clause (i) on the cost of production or manufacture including profits, if any, which the assessee would have normally earned on the sale of such goods" 6. Section 4 of the Central Excise Act, 1944, underwent certain changes, as substituted by Section 94 of the Finance Act, 2001, wherein, duty was chargeable on the transa....

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....ied under Notification No. 45/2000-C.E. (N.T), dated 30-6-2000, is ultra vires, Section 4(1)(b) and 37 of the Act. The authority under Section 4(1)(b) is to arrive at the value as near equivalent to the transaction value, or the normal price. The Rule cannot ignore the actuals under the Act. It has also been stated that the impugned Rule 8 is ultra vires Section 37(1), which is to determine the nearest ascertainable equivalent of the normal price. Section 37(2)(i) enables determining for Section 4 "the nearest ascertainable equivalent of the normal price". The normal price for Section 4 is the price at which the goods are sold being the transaction value. Thus, the impugned rule is ultra vires Section 37(2)(i). The earlier Rule 6(b)(ii) was....

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....ptively consumed on cost construction method, as provided in Rule 8 of the Central Excise (Valuation) Rules 2000, as there were disputes in adopting the values of comparable goods. The assessable value of captively consumed goods will be taken at 115% of the cost of manufacture of goods even if identical, or comparable goods are manufactured and sold by the same assessee. The concept of deemed profit for notional purposes has been done away with and a margin of 15% by way of profit etc., is prescribed in the Rule in case of assessment of goods used for captive consumption. The intention of the Government is to make the Valuation Rules as simple as possible and free from ambiguity. 10. It has been further stated that as per Section 4(1)(a....