Custom, Excise & Service Tax Tribunal Rail Coach Factory vs Ludhiana on 23 September, 2025 CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL CHANDIGARH REGIONAL BENCH COURT NO. I Excise Appeal No. 50086 of 2014 [Arising out of OrderinOriginal No. 68/LDH/2013 dated 01.10.2013 passed by the Commissioner of Central Excise, Ludhiana] M/s Rail Coach Factory ......Appellant Kapurthala, Punjab144602 VERSUS Commissioner of Central Excise, ......Respondent Ludhiana GST Bhawan, FBlock, Rishi Nagar, Ludhiana, Punjab141001 WITH Excise Appeal No. 60392 of 2017 [Arising out of OrderinOriginal No. 1213/CE/CHDII/2017 dated 14.02.2017 passed by the Commissioner of Central Excise, Chandigarh] M/s Rail Coach Factory ......Appellant Kapurthala, Punjab144602 VERSUS Commissioner of Central Excise, ......Respondent Ludhiana GST Bhawan, FBlock, Rishi Nagar, Ludhiana, Punjab141001 APPEARANCE: Shri Sudhir Malhotra and Ms. Kanika Malhotra, Advocates for the Appellant Shri Aniram Meena and Ms. Amita Gupta, Authorized Representatives for the Respondent HON'BLE MR. P. ANJANI KUMAR, MEMBER (TECHNICAL) 2 E/50086/2014 E/60392/2017 FINAL ORDER NO. 6140761408/2025 DATE OF HEARING: 16.09.2025 DATE OF DECISION: 23.09.2025 P. ANJANI KUMAR: The appellants, M/s Rail Coach Factory, are engaged in manufacture of railway passenger coaches and parts thereof; the appellants are clearing the goods to Indian Railways on payment of central excise duty on value arrived by taking into consideration all expenses and costs as per CAS4 & nonCAS4 costs; it appeared to the Revenue that the appellants are required to pay central excise duty as per Rule 8 of the Central Excise Valuation Rules, 2000 in view of the Rule 11; two show cause notices dated 07.05.2013 & 21.02.2014, covering the periods April 2012 to January 2013 and February 2013 to December 2013 respectively were issued demanding differential duty; the proposals in the show cause notice were confirmed vide OrdersinOriginal dated 01.10.2013 and 14.02.2017 respectively; hence these appeals E/50086/2014 & E/60392/2017. 2. Shri Sudhir Malhotra, learned Counsel for the appellants submits that the appellant manufactured and cleared impugned goods to Indian Railways i.e. to themselves; there is no dispute on this count; he submits that section 4(1)(a) of Central Excise Act, 1944 stipulates the determination of transaction value where goods are sold at time and place of removal where assessee and the buyer 3 E/50086/2014 E/60392/2017 are not related person; section 4(1)(b) read with Valuation Rules 2000 stipulates where goods are captivity consumed or sold to/through related person, the criteria for determination of assessable value has been prescribed under Valuation Rules 2000; Rule 11 of the Valuation Rules 2000 stipulates determination of value by using reasonable means consistent with the principles and general provisions of the Rules and Section 4 (1) of Central Excise Act 1944; the Valuation Rules 2000 stipulates determination of value of excisable goods when goods are sold at a place other than place of removal; sold through related person or where goods are not sold but are consumed for manufacture of final product or where goods are not sold at the time and place of removal; the price ultimately charged on selling of said goods or where goods are captively consumed, the value of such goods should be 110 % of cost of production or manufacture of such goods. Learned Counsel further submits that the show cause notice dated 04.12.2014 accepts that there is no specific Rule under Valuation Rules, 2000 which provides the determination of value in the instant case. 3. Learned Counsel further submits that the adjudicating authority failed to appreciate that the impugned goods were neither sold by the appellant nor by Indian Railways; they are not also used further in the manufacture of excisable goods and therefore, the Central Excise (Valuation) Rules, 2000 are not applicable; the appellant is paying the duty inadvertently and therefore, the duty paid requires to be refunded rather than demanding the di