NIRLON LTD. Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) Shri M.H. Patil, learned Advocate for the appellants state that this appeal relates to the issue of valuation of caprolactum made from polyamide chips. He states that the cost construction method under Central Excise valuation Rule 6(b)(ii) has been applied without considering the appellants plea for valuation under comparable value method with adjustment under Rule 6(b)(i). He further contends that in view of the specific hierarchy in the Valuation Rules, Rule 6(b)(ii) can only be applied after exhausting the possibility of applying Rule 6(b)(i). Moreover, he contends that under the cost construction method, the value which has been arrived at is higher than the value of goods manufactured by G.S.F.C. which is of higher quality. It is the plea of the appellants that comparable value method should be applied in their case with adjustment allowed for quality.

(2.) We have heard Shri M.H. Sheikh, learned J.D.R. for the Department.

(3.) We find that under Central Excise (Valuation) Rule 6(b)(ii), only if the value can not be determined under Rule 6(b)(i), valuation has to be determined on the basis of cost of production. The specific provision in the Rules supports the contention of the appellants that there is a hierarchy in the Rules and without exhausting the applicability of the former, the subsequent rule cannot be applied.