Per Jyoti Balasundaram : The issue referred to the Larger Bench is whether the assessable value in respect of goods which are transferred to another plant of the same assessee is required to be determined as per Rule 4 of the Central Excise Valuation Rules, 2000 (as claimed by the appellant) or as per Rule 8 of the said rules (as claimed by the Revenue), in a case where the same goods are also sold to independent buyers?

2. We have heard both sides. It is an undisputed position that the assessees were transferring a part of its production (about 20%) of HR coils to its units at Taloja, Kamothe and Kalmeshwar and the balance production was being sold to independent buyers. It is also not disputed that the value on which duty has been discharged by them at the time of clearance of goods to their units was the same at which duty was discharged by them in respect of clearances to independent third parties. Before the referral Bench, the assessees had placed reliance on the decision of the Tribunal in the case of Avon Tubes Vs. CCE, Ludhiana, 2004 (117) ECR 616 wherein the Tribunal held that when the goods are partly sold to unrelated buyers and rest are captively consumed, the assessable value of the captively consumed goods should be determined based on the value at which the goods are sold to unrelated buyers. It was further held that Rule 8 of Valuation Rules is applicable only in a situation where all the excisable goods manufactured by an assessee are captively consumed by him or on his behalf in the production or manufacture of other articles. On the other hand, learned DR appearing for the Revenue had placed reliance on the decision of the Tribunal in the case of BOC (I) Ltd. Vs. CCE, 2004 (168) ELT 478 wherein the Tribunal had by referring to CBEC Circular No. 643/34/2002-CX. dated 1.7.2002 [reported in 2002 (51) RLT M42], held that where goods are captively consumed within the same factory, valuation should be determined in terms of Rule 8 and where goods are transferred to a sister unit or another factory of the same company, valuation of the said goods should be done as per the proviso to Rule 9 of the Valuation Rules.

3. Shri Vipin Jain, learned Advocate appearing on behalf of the assessees, along with Shri Vishal Agarwal, Chartered Accountant, raised the following contentions:

(a) There is no conflict between the decisions of the Tribunal in the case of Avon Tubes Ltd. Vs. CCE, Ludhiana, 2004 (117) ECR 616 and BOC India Ltd. Vs. CCE, 2004 (168) ELT 478. Both the decisions are unanimous in their view that if all the clearances are for captive consumption and there are no clearances to independent buyers, then the provisions of Rule 8 will apply.

(b) The decision of Tribunal in BOC's case has no application to the assessee's case, as unlike in BOC's case, where the entire production was captively consumed, bulk of assessee's clearances are made to independent buyers. In BOC's case, the entire production was cleared for captive use and there was no instance of sale to an independent buyer, so as to enable determination of assessable value under Rule 4.

(c) The question referred to the Larger Bench, i.e. whether Rule 4 or Rule 8 of the Valuation Rules would apply is a hypothetical question insofar as the assessee is concerned, as the provisions of Rule 8 are inapplicable to the present case for the following two reasons: