2026-VIL-277-CESTAT-BLR-CE
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CENTRAL EXCISE CESTAT Cases

Central Excise - Valuation of excisable goods cleared by 100% EOU to DTA - Appellant, an 100% EOU had initially cleared goods to its holding company in DTA by paying Basic Customs Duty (BCD) and Countervailing Duty (CVD) based on the MRP of the goods less abatement. However, from February 2012, the appellant changed the method of assessment by discharging BCD on the transaction value at which the goods were sold to its holding company and continued to adopt the MRP-based assessment for calculation of CVD - Department objected to the change in the method of valuation and demanded differential duty by adopting the MRP less abatement as the value for assessment of BCD - Whether the assessable value for DTA clearance for computing Basic Customs Duty should be determined taking into consideration the MRP less abatement or the transaction value at which the manufactured goods are sold by the appellant to their holding company – HELD - The MRP less abatement cannot be the basis for determination of assessable value for the purpose of computation of BCD, as held in several earlier judgments. However, the claim of the appellant that the comparable price be that of the FOB value of same or similar goods cleared for export cannot be adopted in view of the judgment of the Supreme Court in the case of CCE, Nagpur Vs. Morarjee Brembana Ltd. wherein it was held that in cases where excisable goods are produced or manufactured by a 100% EOU and allowed to be sold in India, the value of such excisable goods shall be determined in accordance with the provisions of the Customs Act, 1962 and the Customs Tariff Act, 1975 - In the present case, the determination of assessable value applying the MRP less abatement cannot be acceptable; however, the assessable value be determined by applying Rule 4 to 8 of Customs Valuation Rules, 2007 in absence of evidence to show the transaction value is the genuine one in view of the relationship between the appellant and the purchasers - The appeals are disposed of by way of remand
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