Rule for value of Excisable Goods.

[Kunal Pawar]

Sir,

If a manufacturer clearing 95% of his finished goods to the related buyer and remaining 5% to other independent buyers, then under what Rule of Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000, the value of the Excisable goods will be determined.

AI Summary

Related-party valuation under rule 9: determine excisable value on cost of production plus markup; independent sales on transaction value.
Related-party transfers are valued by reference to cost of production under CAS 4 with an added markup, while independent sales use transaction value; CAS 4 excludes interest, profit margin and depreciation components that duplicate cost, but includes depreciation forming part of manufacturing overheads. Authorities may consider prices to unrelated buyers and require adjustments for marketing expenses; valuation provisions for captive consumption apply only where there is no sale.