TaxTMI 
TaxTMI 
2026 (9) TMI 1498
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.... as "the Act") for carrying out manufacturing and other activities in the said integrated steel plant (hereinafter referred to as the "said factory"). (iii) DSP clears on stock transfer basis excisable goods manufactured by it to its units under Steel Authority of India Limited, including to its sister units, Alloy Steel Plant, Durgapur, Bokaro Steel Plant, Bokaro, Bhilai Steel Plant, Bhilai and Indian Iron and steel Company, Burnpur, West Bengal (said sister units in short). Such goods are cleared to the said sister units for their use and further processing on the basis of available cost of production as per CAS-4 derived after finalisation of accounts duly audited up to level of C and AG, Government of India. The said goods part of which were stock transferred to said sister units, wherein they were used captively for the purpose of production of other final products. In addition, some of the said goods were sold to unrelated buyers. (iv) The appellant duly paid central excise duty on the said goods cleared for captive consumption on the assessable value as determined under the provisions of Rule 8 of the Central Excise Valuation (Determination of Price of Exci....
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....ations to the contrary made in the show cause notice had no substance or merit whatsoever. The Joint Commissioner was, in the premises, requested to drop the misconceived proceedings initiated thereunder against the appellant. (vii) The appellant also, through its representative, participated in the personal hearing granted to it by the Joint Commissioner and made submissions, inter alia, reiterating the statements and submissions made in its reply dated October 29, 2010. (viii) However, on November 29, 2010 the appellant received an Order-in-Original No.142/JC/BOL/10 dated November 1, 2010 passed by the Joint Commissioner, whereby he wrongfully and illegally purported to reject the appellant's contentions and confirmed the demand of central excise duty of Rs. 48,48,132/- against the appellant under Section 11A (2) of the Act, along with interest thereon in terms of Section 11AB of the Act. The Joint Commissioner also purported to impose an equivalent amount of penalty of Rs. 48,48,132/- upon the appellant under Section 11AC of the Act. (ix) Being aggrieved by the said purported order passed by the Joint Commissioner, the appellant preferred an appeal aga....
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....nder: - "Issue (a) Whether the appellant has paid the duty correctly in accordance with Rule 8 of the Valuation Rules or the appellant is liable to pay duty in terms of Rule 4 of the Valuation Rules ? 7. We find that the Circular No.692/8/2003-CX dated 13.02.2003 is relevant in the present facts and circumstances of the case. Accordingly, the same is extracted below: "Valuation (Central Excise) - Captive consumption - Cost of production to be in accordance with CAS-4 Circular No. 692/8/2003-CX., dated 13-2- 2003 F. No. 6/29/2002-CX.I Government of India Ministry of Finance (Department of Revenue) Central Board of Excise & Customs, New Delhi Subject: Valuation of goods captively consumed. 1. I am directed to say that on introduction of Central Excise Valuation (Determination of Price of Excisable goods) Rules, 2000, w.e.f. 1-7-2000, it was clarified by the Board vide Circular No. 354/81/2000-TRU, dated 30-6- 2000 (para 21) [2000 (119) E.L.T. T22] that for valuing goods which are captively consumed, the general principles of costing would be adopted for applying Rule 8. The Board has interacted ....
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....that the cost of production of captively consumed goods will "henceforth" be done strictly in accordance with CAS-4. Even in the absence of such a statement, it would be correct to follow the Circular inasmuch as 'general principles' are of guidance without regard to time and an assessee would be well within his rights to demand that a dispute involving him may be decided according to "the general principles" applicable to the issue in dispute, irrespective of what a Circular of the Government may say. In the present case such a situation does not arise since the Circular has taken care to specifically clarify that "existing instructions may be deemed to be modified". Since the earlier instruction is to be deemed to be modified, it would not be permissible to apply them without the said modification. The appellant-assessees are also right in their contention that Revenue is bound by the Circular; while assessees are at liberty to contest the circulars. Therefore, in pending matters, the assessee can seek determination of his case under a later beneficial circular by pointing out that instructions contained in the earlier circulars are incorrect and the matter should be settled acco....
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....hich had been raised by the Revenue prior to and independently of a circular, cannot be extinguished on a plea that a subsequently issued circular is prospective in operation. That is not the case in the present appeals. The revenue seeks to finalise pending valuations applying different costing principles on the plea that different criteria had been circulated from time to time. The assessees are contesting the correctness of that approach by contending that the instructions contained in the earlier circulars were not in conformity with the general principles of cost accounting, and that the latest circular which incorporated correct principles should be followed in all pending cases. It is also to be noticed that the latest circular of 2003 specifically states that the earlier instructions have to be "deemed to be modified" by the later circular. Thus, Revenue had no independently sustainable claim. Its claim is based entirely on circulars issued from to time. That too, on incorrect costing principles. It would be wholly incorrect to apply old circulars without considering the modifications brought about by the latest circular, particularly when, as noted already, it is well sett....