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Central Excise Valuation (determination of price of excisable goods) Rules, 2000
(DETERMINATION OF PRICE OF EXCISABLE GOODS) RULES, 2000
[M.F. (D.R.) Notification No. 45/2000-C.E. (N.T.), dated
30-06-2000
as amended by Notification No. 11/2003-C.E. (N.T.), dated 01.03.2003,
60/2003-C.E. (N.T.), dated 05.08.2003 and 09/2007-C.E. (N.T.), dated
01.03.2007,]
In exercise of the powers conferred by section 37 of the Central Excise Act,
1944 (1 of 1944), and in supersession of the Central Excise (Valuation) Rules,
1975 except as respect things done or omitted to be done before such
supersession, the Central Government hereby makes the following rules, namely
:-
Rule 1.
(1) These rules may be called the Central Excise Valuation (Determination of
Price of Excisable Goods) Rules, 2000.
(2) They shall come into force on and from the 1st day of July, 2000.
Chapter I
Preliminary
Rule 2. In these rules,
unless the context otherwise requires, -
(a) "Act" means the
Central Excise Act1944 (1 of 1944);
(b) "normal transaction value" means the transaction
value at which the greatest aggregate quantity of goods are sold;
(c) "value" means the value referred to in section 4 of
the Act;
(d) words and expressions used in these rules and not
defined but defined in the Act shall have the meanings respectively assigned to
them in the Act.
Chapter II
Determination of Value
Rule 3.
The value of any excisable goods shall, for the purposes of clause (b) of
sub-section (1) of section 4 of the Act, be determined in accordance with these
rules.
Rule 4. The value of the excisable goods
shall be based on the value of such goods sold by the assessee for delivery at
any other time nearest to the time of the removal of goods under assessment,
subject, if necessary, to such adjustment on account of the difference in the
dates of delivery of such goods and of the excisable goods under assessment, as
may appear reasonable.
Rule 5. Where any excisable goods are sold in the circumstances
specified in clause (a) of sub-section (1) of section 4 of the Act except the
circumstances in which the excisable goods are sold for delivery at a place
other than the place of removal, then the value of such excisable goods shall
be deemed to be the transaction value, excluding the cost of transportation
from the place of removal up to the place of delivery of such excisable goods.
Explanation 1.
- "Cost of transportation" includes -
(i) the actual cost of
transportation; and
(ii) in case where freight is
averaged, the cost of transportation calculated in accordance with generally
accepted principles of costing.
Explanation 2.
- For removal of doubts, it is clarified that the cost of transportation from
the factory to the place of removal, where the factory is not the place of
removal, shall not be excluded for the purposes of determining the value of the
excisable goods.
Rule 6. Where the excisable goods are sold in
the circumstances specified in clause (a) of sub section (1) of section 4 of
the Act except the circumstance where the price is not the sole consideration
for sale, the value of such goods shall be deemed to be the aggregate of such
transaction value and the amount of money value of any additional consideration
flowing directly or indirectly from the buyer to the assessee.
Explanation 1 - For removal of doubts, it is hereby clarified that
the value, apportioned as appropriate, of the following goods and services,
whether supplied directly or indirectly by the buyer free of charge or at
reduced cost for use in connection with the production and sale of such goods,
to the extent that such value has not been included in the price actually paid
or payable, shall be treated to be the amount of money value of additional
consideration flowing directly or indirectly from the buyer to the assessee in
relation to sale of the goods being valued and aggregated accordingly, namely :
-
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(i)
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value of materials, components, parts and
similar items relatable to such goods;
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(ii)
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value of tools, dies, moulds, drawings,
blue prints, technical maps and charts and similar items used in the
production of such goods;
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(iii)
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value of material consumed, including
packaging materials, in the production of such goods;
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(iv)
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value of engineering,
development, art work, design work and plans and sketches undertaken
elsewhere than in the factory of production and necessary for the production
of such goods.
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Explanation 2. - Where an assessee
receives any advance payment from the buyer against delivery of any excisable
goods, no notional interest on such advance shall be added to the value unless
the Central Excise Officer has evidence to the effect that the advance received
has influenced the fixation of the price of the goods by way of charging a
lesser price from or by offering a special discount to the buyer who has made
the advance deposit.
Illustration 1.
- X, an assessee, sells his goods to Y against full advance payment at Rs. 100
per piece. However, X also sells such goods to Z without any advance payment at
the same price of Rs. 100 per piece. No notional interest on the advance
received by X is includible in the transaction value.
Illustration 2.
- A, an assessee, manufactures and supplies certain goods as per design and
specification furnished by B at a price of Rs. 10 lakhs.
A takes 50% of the price as advance against these goods and there is no sale of
such goods to any other buyer. There is no evidence available with the Central
Excise Officer that the notional interest on such advance has resulted in
lowering of the prices. Thus, no notional interest on the advance received
shall be added to the transaction value.
Rule 7. Where the excisable
goods are not sold by the assessee at the time and place of removal but are
transferred to a depot, premises of a consignment agent or any other place or
premises (hereinafter referred to as "such other place") from where the
excisable goods are to be sold after their clearance from the place of removal
and where the assessee and the buyer of the said goods are not related and the
price is the sole consideration for the sale, the value shall be the normal
transaction value of such goods sold from such other place at or about the same
time and, where such goods are not sold at or about the same time, at the time
nearest to the time of removal of goods under assessment.
Rule 8. Where the excisable goods are not sold by
the assessee but are used for consumption by him or on his behalf in the
production or manufacture of other articles, the value shall be one hundred and
ten per cent of the cost of production or manufacture of such goods.
Rule 9. When the assessee so arranges that the
excisable goods are not sold by an assessee except to or through a person who
is related in the manner specified in either of sub-clauses (ii), (iii) or (iv)
of clause (b) of sub-section (3) of section 4 of the Act, the value of the
goods shall be the normal transaction value at which these are sold by the
related person at the time of removal, to buyers (not being related person); or
where such goods are not sold to such buyers, to buyers (being related person),
who sells such goods in retail :
Provided that in a case where the related person does not sell the goods but
uses or consumes such goods in the production or manufacture of articles, the
value shall be determined in the manner specified in rule 8.
Rule 10. When the assessee so arranges that the
excisable goods are not sold by him except to or through an inter-connected
undertaking, the value of goods shall be determined in the following manner,
namely :-
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(a)
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If the undertakings are so connected that
they are also related in terms of sub-clause (ii) or (iii) or (iv) of clause
(b) of sub-section (3) of section 4 of the Act or the buyer is a holding
company or subsidiary company of the assessee, then the value shall be
determined in the manner prescribed in rule 9.
Explanation. - In this clause "holding
company" and "subsidiary company" shall have the same meanings as in the
Companies Act, 1956 (1 of 1956).
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(b)
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in any other case, the value shall be determined as if
they are not related persons for the purpose of sub-section (1) of section
4.
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Rule 10A. Where the excisable goods are produced
or manufactured by a job-worker, on behalf of a person (hereinafter referred to
as principal manufacturer), then, -
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(i)
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in a case where the goods are sold by the
principal manufacturer for delivery at the time of removal of goods from the
factory of job-worker, where the principal manufacturer and the buyer of the
goods are not related and the price is the sole consideration for the sale,
the value of the excisable goods shall be the transaction value of the said
goods sold by the principal manufacturer;
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(ii)
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in a case where the goods are not sold by
the principal manufacturer at the time of removal of goods from the factory
of the job-worker, but are transferred to some other place from where the
said goods are to be sold after their clearance from the factory of
job-worker and where the principal manufacturer and buyer of the goods are
not related and the price is the sole consideration for the sale, the value
of the excisable goods shall be the normal transaction value of such goods
sold from such other place at or about the same time and, where such goods
are not sold at or about the same time, at the time nearest to the time of
removal of said goods from the factory of job-worker;
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(iii)
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in a case not covered under clause (i) or
(ii), the provisions of foregoing rules, wherever applicable, shall mutatis
mutandis apply for determination of the value of the excisable goods :
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Provided that the cost of
transportation, if any, from the premises, wherefrom the goods are sold, to the
place of delivery shall not be included in the value of excisable goods.
Explanation.
- For the purposes of this rule, job-worker means a person engaged in the
manufacture or production of goods on behalf of a principal manufacturer, from
any inputs or goods supplied by the said principal manufacturer or by any other
person authorised by him.
Rule 11. If the value of any excisable goods cannot be
determined under the foregoing rules, the value shall be determined using
reasonable means consistent with the principles and general provisions of these
rules and sub-section (1) of section 4 of the Act.
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