2025-VIL-640-CESTAT-AHM-CE
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CENTRAL EXCISE CESTAT Cases

Central Excise - Valuation, Captive Consumption, Excise Duty - The Appellant are manufacturing BOPP films, and during the process of manufacturing, waste/scrap of plastic is generated. Some of the quantity of waste/scrap is cleared on payment of Central Excise duty and some of the quantity of PP granules so manufactured is further used in the factory for manufacture of BOPP films whereas rest of the quantity is cleared to independent buyers. The appellant availed exemption from payment of duty as per Notification No. 67/1995-CE dated 16.03.1995 on the quantity of PP granules & waste and scraps captively consumed in the manufacture of BOPP films. The Revenue alleged that the valuation of such captively consumed waste and scrap should be determined on the basis of CAS-4 as quality of waste and scrap used captively is much better than the quality of waste and scrap cleared to independent buyers, and accordingly demanded differential duty - Whether the valuation of waste and scrap captively consumed by the appellant for manufacture of PP granules should be based on the sale price to independent buyers or on the basis of CAS-4 under Rule 8 of the Central Excise Valuation Rules, 2000 - HELD - As per the decision in the appellant's own case for the previous period, for the purpose of captive consumption, the value of transaction made through the outside buyer should be taken as the assessable value - The show cause notice did not allege that the waste and scrap sold to independent buyers and captively consumed were of different quality, and no investigation was carried out to establish the same. The Tribunal relied on the decision in Ispat Industries Ltd. Vs. CCE, Raigad, wherein it was held that when independent factory sale price is available, that should be the basis for determining the value of same excisable goods captively consumed - The CAS-4 is a residual procedure and when transaction value under Section 4(1)(a) of the Central Excise Act is available, there is no need to resort to Section 4(1)(b) and Rule 7 of the Central Excise Valuation Rules, 2000 - Further, the department's reliance on the decision in Commissioner of Central Excise, Pune Vs. Cadbury India Ltd is misplaced as the facts are entirely different, as in that case the goods were 100% consumed captively and no portion of it was sold to independent buyers - The appeals are allowed and the impugned orders are set aside
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