Central Excise Valuation - Board explains amendments to Rules
RULES 8, 9 and 10 of the Central Excise Valuation Rules, 2000 dealing with determination of assessable value in case of captive consumption and sale to related person have been amended vide notification no. 14/2013 - Central Excise (N.T.) dated 22.11.2013 to clearly state that these rules apply irrespective of whether the whole or a part of the clearances of manufactured goods are covered by the circumstances given in these rules. Each clearance is required to be assessed according to section 4(1)(a) or the relevant rule dealing with the circumstances of clearance of the goods, as the case may be.
Board gives an example:
If an assessee clears his goods in such a way that
first removal of goods is to independent buyers,
some goods are captively consumed,
second removal is to such a related person who is covered under rule 9 and
third removal is to a person who is covered under rule 10,
then
the first removal should assessed under section 4(1)(a),
captively consumed goods should be assessed under rule 8
second removal should be assessed under rule 9 and
third removal should be assessed under rule 10 of these rules.
Board informs that Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 are not required to be followed sequentially. Each of these rules provide for arriving at the assessable value of goods under different contingencies as noted by the Supreme Court at paragraph 70 in case of Commissioner of Central Excise, Mumbai vs M/s FIAT India Pvt Ltd - ].
Sub-standard drafting of laws and confusing clarifications later only advance the cause of growth in litigation.
The Board has made a passing reference to the FIAT case (above) - everybody knows that FIAT judgement is not what even the most optimistic department ever wanted, but just because it is in favour of the Government, they are keeping quiet.
Fiat as a car doesn't seem to be running well in India, but the Fiat case has run into the very basic foundation of the Central Excise Valuation Law, shaking it from the roots and the Government has just put a silencer as Fiat runs amuck.
CBEC Circular No. 975/09/2013-CX, Dated: November 25, 2013