a)Assessee, a job-worker, was manufacturing motor vehicle parts for use by principal in manufacture of motor vehicles
b)Assessee and principal were related in terms of section 4(3)(b)(i) viz. interconnected undertaking.
c)Department sought valuation of 'parts' under rule 8 or proviso to rule 9 as captively consumed goods.
d)Assessee claimed valuation as per rule 11 at 'cost of materials plus job-work charges' treating assessee/job-worker's premises as deemed factory gate.
Supreme Court held in favour of assessee as under:
1)Since parts were not captively consumed by assessee-jobworker or on his behalf in production or manufacture of other articles, hence, rule 8 was inapplicable.
2)Rule 9 and consequently, proviso to rule 9, was inapplicable Since assessee and principal were interconnected undertaking related in terms of section 4(3)(b)(i). This is because rule 9 mentions relationship that is visualised in sub-clauses (ii) to (iv) only and excludes clause (i). Further, since main rule 9 is not attracted, question of applicability or proviso thereto does not arise.
3)Once it was concluded that above rules is not applicable in the case of the assessee, it is rule 11 only which becomes applicable as that is residuary provision for arriving at the value of any excisable goods which are not determined under any other rule - Commissioner of Central Excise, Pune v. Mahindra Ugine Steel Co. Ltd. (2015) 57 taxmann.com 299 (SC).