Notification 20/2014 dt.11-07-2014

[Ganeshan Kalyani]

Hi, I request to clarify the changes vide Notification 20/2014 dt. 11th July, 2014.

[YAGAY andSUN]

Dear Ganesh,

Please confirm that this Notification pertains to which legislature. Whether to Central Excise or Customs?

Please be sure to provide the full reference of the Notification, while asking for reply to such query.

Regards

Team YAGAY and SUN

[Ganeshan Kalyani]

Well noted sir. The notification 20/2014 pertains to Central Excise.

[YAGAY andSUN]

Dear Ganesh,

The Tenth Schedule to the Finance Act, 2010 dealing with Clean Energy Cess is being amended so as to expand the scope of purposes of levy of the said cess to include clean environment initiatives and funding research in the area of clean environment. Clause 111 of the Finance (No.2) Bill, 2014 refers. The Clean Energy cess is being increased from ₹ 50 per tonne to ₹ 100 per tonne. Notification No.3/2010-CE dated 22.06.2010 which prescribes the effective rate of ₹ 50 per tonne is being rescinded vide notification No.20/2014-Central Excise, dated 11thJuly, 2014. Henceforth, the rate of Clean Energy Cess will be the tariff rate i.e. ₹ 100 per tonne.

Regards,

Team YAGAY and SUN

(Management and Indirect Tax Consultants)

[Mahir S]

.Yes, the said notification pertains to clean energy cess as explained above.

Mr. Ganesh, did u mean noti. no. 20/2014 CE or noti. no. 20/2014 CE N.T.

[Ganeshan Kalyani]

I mean Notification No 20/2014 – Central Excise (N.T.). Changes in Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000.

[YAGAY andSUN]

Dear Ganesh,

As discussed, you had not provided the complete notification number while raising a query. Please take care of this aspect in future. When Mr. Naveed asked you, then, you provided the clarification. Please be clear and specific whenever you raise a query. We are here to help you out and it consumes our time to revert on your queries.

Now coming back to reply to your query:- This amendment is made in connection with Fiat judgment where in it was held that even selling the cars below the cost of production for the purpose of penetration in or capture the Indian Market would tantamount to consideration and the appellant was liable to pay the central excise duty on this account.

This judgment was considered by the foreign investor as a blockade for investing in India, Therefore, in this budget this proviso was brought in the valuation rules.

Amendments in the Central Excise Valuation Rules, 2004:

The Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 is being amended so as to provide that in cases where excisable goods are sold at a price below the manufacturing cost and profit and there is no additional consideration flowing from the buyer to the assessee directly or from a third person on behalf of the buyer, value for the assessment of duty shall be deemed to be the transaction value.

Notification No.45/2000-Central Excise (NT) dated 30thJune, 2000 as amended vide notification No.20/2014-Central Excise dated 11thJuly, 2014 refers.

Regards

Team YAGAY and SUN

(Management and Indirect Tax Consultants)

[Ganeshan Kalyani]

well noted sir.

AI Summary

Central Excise valuation rules deem transaction value where goods sold below cost absent additional consideration, altering assessment approach. The notification rescinds the prior effective-rate prescription and aligns the Clean Energy Cess with the tariff rate while expanding its uses to environmental initiatives and research. It also amends the Central Excise Valuation Rules to provide that where goods are sold below manufacturing cost plus profit and no additional consideration flows from the buyer or a third party, the value for duty assessment shall be deemed to be the transaction value.