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Supreme Court elaborates on Method of Determination of Value of Excisable Goods [Read Judgment]

Excisable Goods - Supreme Court - Taxscan

The Supreme Court laid down detailed principles to keep in mind while determining the value of the Excisable Goods.

The appeals were disposed of by the Supreme Court, confirming the impugned orders of CESTAT setting aside the Order in Original passed by the Adjudicating Authorities and remanding the matters back for re­adjudication.

However, while carrying out the exercise of re­adjudication, the Adjudicating Authorities should keep in mind the various principles.

Firstly, in the cases where the period of assessment is prior to July 1, 2000 and if the case falls under Section 4(1)(b) and the Adjudicating Authority takes recourse to the method of valuation prescribed in the 1975 Rules, he shall find out which among the relevant rules would apply to the cases on hand before proceeding with the valuation.

Secondly,  in the cases where the period of assessment is after to July 1, 2000 and if a case falls under Section 4(1)(b) and the Adjudicating Authority takes recourse to the method of valuation prescribed in the 2000 Rules, he shall find out which among the relevant rules would apply to the case on hand before proceeding with the valuation.

Thirdly, the Adjudicating Authority may treat any amount received either in cash or otherwise, over and above the invoice value, as the value of excisable goods even in cases falling under Section 4(1)(a) (after the amendment), as the definition of “transaction value” under Section 4(3)(d) means the price actually paid or payable.

Fourthly, the Adjudicating Authority shall keep in mind the fact that while the expression “normal price” was not defined in Section 4(1) before amendment, the expression “transaction value” is defined very exhaustively in Section 4(3)(d) and this
definition is both inclusive as well as exhaustive.

Fifthly, wherever there is a finding that a particular dealer/ customer has paid a consideration over and above what is reflected in the invoice, the additional payment made by him together with the invoice value shall be taken to be the transaction value, for all the transactions that the particular dealer/customer had with the assessee. In simple terms, if a dealer/customer has made 10 purchases during the period in question, for a particular value stated in the invoice, the transaction value determined on the basis of material relatable to a few out of those transactions, can be applied to all the transactions of that customer/dealer across the board for that period. However, the same value cannot be applied to the other dealers/ customers. This principle shall be followed in respect of cases arising after the amendment.

The Three Judge Bench of Chief Justice S.A. Bobde, Justice A. S. Bopanna and Justice V. Ramasubramanian while disposing of the appeal directed the Adjudicating Authorities to conduct hearings, afford adequate opportunities to the parties and pass orders in original as early as possible.

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