Central Excise Law

Valuation of goods for the purpose of excise duty: Whereas rates of duty are ad valorem (expressed as percentage of value of goods), which is now the increasing trend, assessable value of the goods has to be found out before the amount of duty leviable thereon is determined and paid. It is the assessee’ responsibility to determine assessable values of his goods, declare, declare them on his invoice and pay duty on the basis thereof.

1.Tariff Value- Where, under Section 3(2) of the At, the Central Government has fixed tariff values for the goods, the assessee’s task is easy, viz. to find out the tariff value for the particular variety from the relevant notification and pay duty thereon. But tariff values are rarely fixed by the Government.

2.M.R.P. Value- (i) Section 4A has been inserted with the object of enabling the Government to charge excise duty with reference to maximum retail price, with such deduction as the Government may allow. In respect of packaged commodities (excluding those for industrial or institutional consumers) which under any law are required to be marked with Maximum Retail Price of the product, under the Legal Metrology Act, 2009 and Legal Metrology (Packaged Commodities) Rules, 2011. The Government has acquired power under Section 4A to notify them for assessment on the basis of such MRP less such abatement as may be notified. The marked MRP should be the sole consideration for the sale. For the products covered under Section 4A and the extent of abatement admissible in respect of each, please see the relevant notification generally issued at the Budget time (present Notification No.49/2008-C.E.(N.T.) dated 24.12.2008) The Government has set up an Advisory Committee to determine the rates of abatement in a transparent manner. Central Excise (Determination of Retail Sale Price of Excisable Goods) Rules, 2008 issued under Section 4A(4) of the Central Excise Act, 1944 prescribes the manner of determination of retail sale price, where the same is not declared on the packages or tampered or altered or obliterated. This change is effective from 01.03.2008.