ESCORTS LTD. vs COMMNR. OF CENTRAL EXCISE DELHI -II

The Supreme Court upheld the decision of the Customs, Excise & Gold (Control) Appellate Tribunal, affirming that the valuation of goods captively consumed must be based on the market price of goods directly sold, as established in Ashok Leyland Ltd. v. Collector of Central Excise, Madras (2002 (10) SCC 344). The Court clarified that Rule 6 of the Central Excise Valuation Rules applies only when prices are unascertainable, and since the goods in question were not identical to those sold in the spare parts market, the principles from Ashok Leyland's case were applicable. The appeal was dismissed, but the penalty imposed by the Collector was set aside.