CBEC clarifies if goods are manufactured on jobwork basis, value for payment of excise duty to be determined as per Rule 10A

Excise Duty on Job Work: Use Rule 10A for Valuation of Goods Transferred to Principal Manufacturer's Sales Point.

The Central Board of Excise and Customs (CBEC) clarifies that when goods, such as motor vehicles, are manufactured on a job work basis, the value for excise duty payment should be determined according to Rule 10A of the Central Excise Valuation Rules, 2000. This rule applies when goods are transferred from the job worker to the principal manufacturer's sales point, and the transaction value should reflect the price at which the principal manufacturer sells the goods. The previous practice of using a cost construction method for duty payment by body builders is deemed incorrect. Compliance with Rule 10A is required to ensure proper duty payment.