TAFE LTD. Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) Shri R. Raghavan, ld. Counsel mentioned that M/s. TAPE Ltd. manufacture components of Tractors which are removed by them to their units; that instead of paying excise duty under Rule 6(b)(i) of Central Excise Valuation Rules, 1975 on the basis of comparable price they were paying duty under Rule 6(b)(ii) of the Valuation Rules on the basis of cost of manufacture. He fairly concedes that after the judgment of the Supreme Court in the case of Ashok Leyland Ltd. v. CCE, Madras reported in 2002 (146) E.L.T. 503 (S.C.) they have to discharge the duty liability on the basis of comparable prices available in respect spare parts. He only prays that the price should be regarded as cum -duty price and relied upon the decision of the Supreme Court the in case of CCE, Delhi v. Maruti Udyog Ltd., reported in 2002 (141) E.L.T. 3 (S.C.). Heard ld. SDR, Smt. R. Bhagya Devi also.

(2.) As the appellants are sending the components of tractors to their other units, this amounts to captive consumption of goods. As per the provisions of Rule 6(b)(i) of the Central Excise (Valuation) Rules, 1975, the assessable value of goods captively consumed is to be determined on the basis of comparable price, if available. The method of determining the assessable value on the basis of cost of manufacture under Rule 6(b)(ii) can be adhered to only if comparable price is not available. As in the present matter, the comparable price of parts sold as spare parts is available, the assessable value has to be determined under Rule 6(b)(i) of the Central Excise (Valuation) Rules. As we are ordering payment of duty on camparable price available, the question of treating comparable price as cum -duty -price does not arise. The reason is the appellants are clearing the same components in the spare parts market on payment of duty and the duty is being made on the assessable value declared by them. Ld. Counsel submits that the department in the present matter instead of taking the assessable value had taken the list price at which the goods were sold by the dealers. This aspect needs examination. We, therefore, remand the matter to the original adjudicating authority to look into this matter as to whether the duty has been computed on the list price of the dealers or assessable value at which the goods were sold in the spare parts market by the appellants. As the issue involves the interpretation we set aside the penalty imposed on them. The appeal is disposed of in these terms.