VALUATION UNDER SEC.4A OF EXCISE ACT

This query is : Resolved

Piyush Jain (Querist)
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07 December 2009 Dear Professional Colleagues, I have one client who is into manufacturing of the product which is under Valuation norms of Sec. 4A of Excise Act, i.e. MRP Valaution. Query: As per valuation norms duty is paid on the amount which is calculated at MRP Rate less Abatement. Now if the sale rate to customer is higher than the value on which excise duty is paid. Is any legal issue is there? As per Sec.4 of Excise Act, duty is to be paid on sale rate. As Sec.4A has overriding provisions and value arrived after reducing Abatement from MRP is less than sales rate and henecforth duty is paid less. Regards, Piyush Jain

CP Ram

CP Ram (Expert)
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07 December 2009 If all the following conditions are satisfied, then, the valuation shall be done as per section 4A as held in Jayanti Food Processing Pvt. Ltd. V. CCEx (2007) 215 ELT 327 (SC) for levy of excise duty:

1) The goods should be excisable goods,
2) They should be such as are sold in the package,
3) There should be requirement in the Standard of Weight and Measures Act or the Rules made thereunder or any other law to declare the retail sale price of such goods on the package, and
4) The Central Govt. must have specified such goods by notification in the Official Gazette.

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