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Central excise act

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Payal K

CA FINAL

106 Points Posted on 10 February 2010

I would like to know

1. Rule 9&10 of the Central Excise Act where if a manufacturer sell goods at Rs.15 to outside party and to related party at Rs.30 and if the related sell the goods to outsider at Rs.40 so on what amount to charge Excise Rs.30 or Rs.40.

2. Provisional Assessment- We pay Prov. Assessment Excise duty and if it is in excess , If we do not deal with the customer any more what would be the treatment excess in terms of accounting ,should we return the excess taken from customer in cash.

Replies (2)

Rajesh Kumar

Advocate- Tax

6957 Points Posted on 11 February 2010

Whereever Rule 9 of Central Excise Valuation Rules are applied, the value of goods is Rs. 40 (the rate at which related person sells the good to unrelated persons). Sale to unrelated person at Rs. 15 is irrelevant for the purpose of Rule 9.

Say for example an assessee sells 99% of the manufactured goods to related person at 30, and 1% to unrelated persons for Rs. 15; will it be prudent to take value at Rs. 15.

Excess is required to be retunrned. However excess duty is not required to be retunred, as he can take credit (receivable for him) or can take refund as he has borne the burden of duty.