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TMI BlogValuation – MRP Based Value – Section 4AX X X X Extracts X X X X X X X X Extracts X X X X ..... n 4A subject to excise duty on the basis of MRP, actual sale price shall be ignored for the purpose of calculation of excise duty. For an example: Goods "X" is being sold for Rs. 50 (transaction value) MRP affixed on "X" Rs. 100. Rate of abatement is 40% Rate of Excise Duty is 16.48% (inclusive of cess) Amount of excise duty shall be calculated as: MRP = Rs. 100 Less rebate @ 40% = Rs. 40 Amount on which duty to be charged = Rs. 60 Amount of Duty = Rs. 9.89 (Note: - For the purpose of calculation of Excise duty in the above example the following shall not be considered at all (i.e. MRP shall not be reduced further): * Freight * Sales Tax / Local Taxes * Margin of the dealer / whole seller etc.) The conditions under whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... factory, is altered to increase the retail sale price, such altered price will be the retail sale price for the purpose of valuation. Goods covered under this section removed without declaring the retail sale price on the packages or where the MRP is tampered, altered or obliterated after their removal, then all such goods will be liable to confiscation. Condition-I: Goods required to be covered under provisions of Weights & Measures Act. As per standard of weights & measures act the provisions of section 4A applies to 'packaged goods' intended for 'Retail sale'. Thus two aspects come forward from above - 1.Section 4A applies only to 'pre-packed commodities' and not to loose commodities. 2. Such package should be intended for 'retail s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f above 50Kgs. Exception: Valuation will be on MRP basis even if product is not really intended for retail sale provided goods are not specially packed for exclusive use of any industry or servicing. Some of the cases are as follows - * Refrigerators sold in bulk to soft drink manufacturers, duty is payable on MRP affixed on them. * Selling of soap to hotels which were used for distribution to customers of hotel [Ishaan Research Lab (2004) 172ELT 484(CESTAT)]. However if the assessee manufactures soap under a special contract for hotel for use of their guests valuation is required to be done u/s 4 i.e. transaction value [CCE v. Trishul Research Lab2002(144) ELT204 (CEGAT)]. Only the goods covered under the provisions of Standard Weig ..... X X X X Extracts X X X X X X X X Extracts X X X X
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