The Fiat Fallout - Car manufacturers Under Excise Scanner
THE famous Fiat judgement () has started its ripples effect. The Supreme Court had held that when the cars were sold at prices below their manufacturing cost, the sale price was not the assessable value for excise duty and value had to be ascertained.
The Board was elated and wanted to know from the field if there were any such instances. While many in the field replied that they had no car manufacturers in their jurisdiction, those who had car manufacturers have asked them to furnish cost of production of each brand of car for the last five years. Now with each car manufacturer making many models of cars, it is possible that some cars may be sold at below cost price and those manufacturers are in for trouble with excise. Further, the cost of manufacture is a highly sensitive information and the car manufacturers may not like such information being available in the sieves of the Central Excise Department.