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TMI BlogClarification of doubts under the new Valuation RulesX X X X Extracts X X X X X X X X Extracts X X X X ..... ow 5. Receipt of this Circular may kindly be acknowledged. Clarifications on points of doubt under The New Valuation Provisions introduced w.e.f. 1.7.2000 Sl no. Points of doubt Clarification 1. What is the scope of the term "greatest aggregate quantity" used in Rule 2(b) of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000. The definition does not indicate the time period over which the quantity is to be computed. Further, it is not clear whether it refers to the largest quantity sold to any particular assessee during the period or to the goods sold to the largest number of buyers. The term "greatest aggregate quantity" has been used to define the term "normal transaction value" used in Rules 7 and 9 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e actual cost of transportation from the place of removal up to the place of delivery is only to be excluded. If the assessee is recovering an amount from the buyer towards the cost of return fare of the empty vehicle from the place of delivery, this amount will not be available as a deduction. If, however, only the cost of transportation has been indicated in the invoice without any breakup for the forward and return journey, normally it should be accepted as the cost of transportation from the place of removal to the place of delivery. (c) Yes, the Apex Court in the case of Bombay Tyres International has held that the cost of transportation will include the cost of insurance also during the transportation of the goods. But the transit in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tention is also invited to paras 10 and 11 of Board's letter F.No.354/81/2000- TRU dt 30.6.2000. 4. Packing:- a. whether cost of secondary packing is to be excluded from the transaction value ? b. How is the cost of reusable containers to be determined for inclusion in the transaction value? c. Whether rental charges or cost of maintenance of reusable metal containers like gas cylinders etc. are to be included in the transaction value? d. What about cost of containers supplied by the buyer? (a) No. There is no provision for such a deduction in the concept of transaction value (b) Normally the cost of reusable containers (glass bottles, crates etc.) is amortized and included in the cost of the product itself. Therefore the questio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ptively consumed would be valued as per Rule 8 of the Valuation Rules. This is because, as per new section 4, transaction value has to be determined for each removal. Where goods are transferred to a sister unit or another unit of the same company valuation will be done as per the proviso to rule 9. 6. Whether advertisement and publicity charges borne by the dealers/buyers are to be excluded from the assessable value No. Even where the dealings are on principal to principal basis but there is an agreement either written or oral that the buyer will incur certain expenditure for advertising the goods of the assessee, the cost of such advertisement and publicity will be added to the price of the goods to determine the assessable value. In su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in such cases the after sales service charges and PDI charges will be included in the assessable value. 8. Will delayed payment charges be excluded from the transaction value? Yes, since " transaction value" relates to the price paid or payable for the goods. In this case the delayed payment charge is nothing but the interest on the price of the goods which is not paid during the normal credit period. However, to be admissible as deduction it should be separately shown or indicated in the invoice and should be charged over and above the sale price of the goods. Attention in this regard is invited to Board's Circular No. 194/28/96-CX dated 29.3.1996 which is still relevant so far as this element is concerned. [Also refer to para 8 of Board' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... existence some immovable property, they will not be included in the assessable value of such resultant property.[Refer Board's 37B Order No 58/1/2002 - CX dt 15.1.2002] 11. How will valuation be done in cases of job-work? Please also refer to Board's Circular No.619/10/2002 - CX dt 19.2.2002. Cost of transporting the raw materials/inputs to the premises of the job-worker will also be added to determine the cost of the raw material/input.[1997(071)ECR381(TRIB)] 12. How will valuation be done when goods are sold partly to related persons and partly to independent buyers? There is no specific rule covering such a contingency. Transaction value in respect of sales to unrelated buyers cannot be adopted for sales to related buyers since as per ..... X X X X Extracts X X X X X X X X Extracts X X X X
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