confused between rule 5 & rule 7

This query is : Resolved

CA Abhishek Singh (Querist)
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29 June 2011 Hi everyone,

RULE 5
is applicable "when the excisable goods are sold for delivery at the place other than the place of removal"

RULE 7
is applicable when the excisable goods are not sold for delivery at the time and place of removal.

my confudion-

"sold for delivery at the place other than the place of removal" &

"not sold for delivery at time and place of removal"

both mean the same thing.

so why different rules and different treatment. please clarify. explanation with examplie will be appreciated.

thanks in advance
my id abhipcc@rediffmail.com

U S Sharma

U S Sharma (Expert)
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30 June 2011 RULE 5. Where any excisable goods are sold in the circumstances specified in clause (a) of sub-section (1) of section 4 of the Act except the circumstances in which the excisable goods are sold for delivery at a place other than the place of removal, then the value of such excisable goods shall be deemed to be the transaction value, excluding the cost of transportation from the place of removal up to the place of delivery of such excisable goods.
Explanation 1. - “Cost of transportation” includes -
(i) the actual cost of transportation; and
(ii) in case where freight is averaged, the cost of transportation calculated in accordance with generally accepted principles of costing.
Explanation 2. - For removal of doubts, it is clarified that the cost of transportation from the factory to the place of removal, where the factory is not the place of removal, shall not be excluded for the purposes of determining the value of the excisable goods.

U S Sharma

U S Sharma (Expert)
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30 June 2011 RULE 7. Where the excisable goods are not sold by the assessee at the time and place of removal but are transferred to a depot, premises of a consignment agent or any other place or premises (hereinafter referred to as “such other place”) from where the excisable goods are to be sold after their clearance from the place of removal and where the assessee and the buyer of the said goods are not related and the price is the sole consideration for the sale, the value shall be the normal transaction value of such goods sold from such other place at or about the same time and, where such goods are not sold at or about the same time, at the time nearest to the time of removal of goods under assessment.