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Transaction Value When Inputs Are Sold and/Or Transferred

Supreme Court of India in the matter of Commissioner of Central Excise , Raigad Versus M/s Ispat Metallics Industries ltd & Ors vide civil appeal no. 2562 OF 2008 & 8557 OF 2015 decided on 6th May 2016 held that 
There is a distinction is made between inputs on which credit has been taken which are removed on sale, and those which are removed on transfer.
If  removed on sale, “transaction value” on the application of Section 4(1)(a) of the valuation rules is to be looked at. However, where the goods are entirely transferred to a sister unit, it is reasonable to adopt the value shown in the invoice on the basis of which Cenvat Credit was taken by the assessee i.e. the invoice of the supplier of the pellets to the assessee.
It also held that
 Post manufacturing expenses cannot be loaded on to the amount equal to the duty of excise leviable on such goods as this amount would, then, cease to be an amount equal to the duty of excise but would be something more.

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