NTF. NO. 45/2000-CE(N.T.), DT. 30/06/2000

1. (1) These rules may be called the Central Excise Valuation (Determination of Price of Excisable Goods) Amendment Rules, 2014.

(2) They shall come into force on the date of their publication in the Official Gazette.

(Rule 1. has been amended vide NTF. NO. 20/2014-CE (NT), DT. 11/07/2014)

[OLD -

1. (1) These rules may be called the Central Excise Valuation (Determination of Price of Excisable Goods) Amendment Rules, 2013.

(2) They shall come into force with effect from the 1st day of December, 2013.

(Rule 1. has been amended vide NTF. NO. 14/2013-CE (NT), DT. 22/11/2013)

[OLD -

1. (1) These rules may be called the Central Excise Valuation (Determination of Price of Excisable Goods) Amendment Rules, 2007.

(2) They shall come into force on the 1st day of April, 2007.

(Rule 1. has been amended vide NTF. NO. 09/2007-CE(N.T.), DT. 01/03/2007)

[OLD -
1.(1) These rules may be called the Central Excise Valuation (Determination of Price of Excisable Goods) Amendment Rules, 2003.

(2) They shall come into force on the date of their publication in the Official Gazette. ]

(Rule 1. has been amended vide Ntf. No. 60/2003-CE, Dt. 05/08/2003)

[OLD -
1. (1) These rules may be called the Central Excise Valuation (Determination of Price of Excisable Goods) Amendment Rules, 2003.

(2) They shall come into force on the date of their publication in the Official Gazette.

(Above (1) & (2) has been substituted vide Ntf. No. 11/2003-CE(NT), Dt. 01/03/2003)]

[OLD - 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. ]

2.    In these rules, unless the context otherwise, requires,-

 

(a) "Act" means the Central Excise Act, 1944 (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.

 

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.

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.

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 upto 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 5 has been substituted vide Ntf. No. 11/2003-CE(NT), Dt. 01/03/2003)

[OLD - 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 circumstance 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 actual cost of transportation from the place of removal upto the place of delivery of such excisable goods provided the cost of transportation is charged to the buyer in addition to the price for the goods and shown separately in the invoice for such excisable goods.]
 

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.

 

Provided that where price is not the sole consideration for sale of such excisable goods and they are sold by the assessee at a price less than manufacturing cost and profit, and no additional consideration is flowing directly or indirectly from the buyer to such assessee, the value of such goods shall be deemed to be the transaction value.

 

(Above proviso has been inserted vide NTF. NO. 20/2014-CE (NT), DT. 11/07/2014)

 

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:-

 

(i) value of materials, components, parts and similar items relatable to such goods;

 

(ii) value of tools, dies, moulds, drawings, blue prints, technical maps and charts and similar items used in production of such goods;

 

(iii) value of material consumed, including packaging materials, in the production of such goods;

 

(iv) 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.

 

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.

 

(In Rule 6 Explanation has been renumbered as Explanation 1 & Explanation 2, Illustration 1, and 2 inserted vide Ntf. No. 11/2003-CE(NT), Dt. 01/03/2003)

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 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.

8. Where whole or part of 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 of such goods that are consumed shall be one hundred and ten per cent of the cost of production or manufacture of such goods.

 

(Above Rule 8 has been substituted vide NTF. NO. 14/2013-CE (NT), DT. 22/11/2013)

 

[OLD- 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 [OLD - one hundred and fifteen per cent] of the cost of production or manufacture of such goods.

 

(In Rule 8. Bold words before OLD has been substituted vide Ntf. No. 60/2003-CE, Dt. 05/08/2003) ]

9. Where whole or part of the excisable goods are sold by the assessee to or through a person who is related in the manner specified in any of the sub-clauses (ii), (iii) or (iv) of clause (b) of sub-section (3) of section 4 of the Act, the value of such goods shall be the normal transaction value [OLD- 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.

(In above Rule 9 the words "Where whole or part of the excisable goods are sold by the assessee to or through a person who is related in the manner specified in any of the sub-clauses (ii), (iii) or (iv) of clause (b) of sub-section (3) of section 4 of the Act, the value of such goods shall be the normal transaction value" has been substituted vide NTF. NO. 14/2013-CE (NT), DT. 22/11/2013)

 

10.  Where whole or part of the excisable goods are sold by the assessee to or through an inter-connected undertaking, the value of such goods shall be determined in the following manner, namely:-

 

[OLD- 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:-]

 

(In above Rule 10 the words "Where whole or part of the excisable goods are sold by the assessee to or through an inter-connected undertaking, the value of such goods shall be determined in the following manner, namely:-" has been substituted vide NTF. NO. 14/2013-CE (NT), DT. 22/11/2013)

 

(a) If the undertakings are so connected that they are also related in terms of sub-clauses (ii) or (iii) or (iv) of clause (b) of sub-section (3) of Section 4 of the Act or the buyers is a holding company or subsidiary company of the assessee, then the value shall be determined in the manner prescribed in the 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).

 

(b) 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.

 

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,-

(i) 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;

(ii) 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;

(iii) 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:

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.

(Above Rule 10A has been inserted vide NTF. NO. 09/2007-CE(N.T.), DT. 01/03/2007)
 

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.

(Note:- see

1. Part III of Ch. 3 as mentioned in New Central Excise Manual, 2001