{"id":234243,"date":"2020-08-19T19:21:54","date_gmt":"2020-08-19T13:51:54","guid":{"rendered":"https:\/\/www.scconline.com\/blog\/?p=234243"},"modified":"2020-08-21T10:08:00","modified_gmt":"2020-08-21T04:38:00","slug":"has-the-amendment-to-section-4-of-the-central-excise-act-1944-affected-the-method-of-determination-of-value-of-excisable-goods-sc-explains","status":"publish","type":"post","link":"https:\/\/www.scconline.com\/blog\/post\/2020\/08\/19\/has-the-amendment-to-section-4-of-the-central-excise-act-1944-affected-the-method-of-determination-of-value-of-excisable-goods-sc-explains\/","title":{"rendered":"Has the amendment to Section 4 of the Central Excise Act, 1944 affected the method of determination of value of excisable goods? SC explains"},"content":{"rendered":"

Supreme Court<\/strong>: Explaining the scheme of provisions under the Central Excise Act, 1944, the 3-judge bench of SA Bobde, CJ and AS Bopanna and V. Ramasubramanian, JJ has laid down elaborate principles that the Adjudicating Authorities has to keep in mind while determining the value of excisable goods. The said order of the Court intends to clear the confusion over the method of determination of value of excisable goods before and after 01.07.2000, since Section 4 of the Central Excise Act, 1944 was amended with effect from 01.07.2000 under Act 10 of 2000.<\/p>\n

CASES WHERE THE PERIOD OF ASSESSMENT IS PRIOR TO 01.07.2000<\/strong><\/span><\/p>\n

I.<\/strong> First ascertain the price at which such goods are ordinarily sold by the assessee to a buyer who is not related to him, in the course of wholesale trade, at the time and place of removal and also find out whether the price is the sole consideration for the sale. If the Adjudicating Authority is able to find this out, he may take such price as the normal price and treat the case as covered by Section 4(1)(a), applying, wherever permissible, the prescriptions contained in the proviso to clause (a) of sub\u00adsection (1) of Section 4.<\/p>\n

II.<\/strong> If the normal price is not ascertainable, either for the reason that the goods are not sold or for any other reason, then he may take it that the case would fall under Section 4(1)(b) and take recourse in such cases, to the Central Excise (Valuation) Rules, 1975.<\/p>\n

III.<\/strong> The phrase \u201cfor any other reason\u201d appearing in Section 4(1) (b) would include cases where the price charged in the course of wholesale trade is not discernible or where the same, though discernible, cannot be linked to delivery at the time and place of removal or where the price is not the sole consideration for the sale, even though the price charged in the course of wholesale trade for delivery at the time and place of removal are available.<\/p>\n

IV.<\/strong> 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.<\/p>\n

CASES WHERE THE PERIOD OF ASSESSMENT IS AFTER 01.07.2000<\/strong><\/span><\/p>\n

I.<\/strong> First ascertain the \u201ctransaction value\u201d, with particular reference to the definition of the said expression contained in Section 4(3)(d)<\/p>\n

II.<\/strong> Apply the transaction value so ascertained, to cases where three conditions, namely<\/p>\n