2004 (11) TMI 139

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....nufacture of compressor or sent to their service centres. 3. The appellants who manufacture compressors have a parent company and also a Stator Rewinding Unit with separate central excise registration for the compressors. They manufacture Stator Wounds in the factory which are captively consumed. They also manufacture Stator Wounds in their Stator Rewinding Unit out of retrieved stator stacks as indicated above. The Stator Wounds are not sold. They are used in the manufacture of compressors or sent to their service centre. Since no sale is involved, the appellants resort to Rule 6b(i) of Central Excise Valuation Rules, 1975. Under this Rule value is based on value of comparable goods. While determining the value of the stator wounds manu....

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....or the Department. 5. The learned advocate urged that Rule 6(b) of the Central Excise Valuation Rules clearly provide for adjustments in the valuation of comparable goods. He said there is always difference between a new item and a used one. While costing the price, due allowance should be given for depreciation. The practice of adopting depreciation is not only recognized under the Income Tax Act but also in Customs and Central Excise Valuation. While clearing capital goods, on which Modvat credit is taken, due allowance is given for depreciation. This is provided in the rules. Similarly while clearing used machinery and motor machines in the Customs, depreciation is allowed in determining value for customs purposes. It is a settled law....