Classification of Chapter heading

[Asked by Guest]

Dear sir,

We are a manufacturer of Electrical Apparatus which we are sale to our another factory situated at Haridwar.

So some our products Define under Tariff Heading 85381010 which is for industrial use and unit of measure is Unit and some of our items we are define under Tariff Heading 85389000 which is Other and unit of measure is KG.

I am confusing on which Tariff Heading it will be define.

Al items we are sold on PCS basis not on KG.

Regards

Swapneswar Muduli

[KASTURI SETHI]

CE duty is leviable on both products ad valorem. Goods falling under Chapter/Sub-heading No.8538 1010 are meant for industrial use i.e. to be used/consumed for manufacture of dutiable final product. If final product is not dutiable, CE duty has to be worked on the cost structure basis which is to certified by the Cost Accountant. Goods under 8538 9000 are meant for sale. Duty is to be paid transaction value. So unit of weighment whether in Kg. or in pcs do not affect the valuation. Ultimate aim is that there should be no revenue loss to Govt.

[Suryanarayana Sathineni]

Dear Swpneswar,

As clarified by Shri. Kastauri Sethi Ji, the question involved is as to how to pay duty . Since the proposal is to clear the goods to your other unit which in in other words meant for captive consumption, you have to pay the duty on the value of cost +10% based on the CAS 4 certificate and of course Industrial use or othewise and UOM is not the critiria.

Best Regards

Surya

[Ganeshan Kalyani]

Sir, I agree with the views submitted by Sri Kasturi Sir and Sri Surya Sir. As per Central Excise Valuation Rules in case of captive consumption the assessable shall be Cost of Production plus 10%. The statements of costing should be certified from Cost Accountant. Thanks.

AI Summary

Valuation for captive consumption: assessable value based on certified cost plus prescribed margin, unit of measure irrelevant.
Valuation differs by purpose: industrial-use items consumed in manufacture of a dutiable product follow transaction valuation or, if the final product is non-dutiable, duty is calculated from the certified cost structure; items meant for sale are valued on transaction value. For captive consumption between related units, assessable value is cost of production plus the prescribed margin, with costing certified by a Cost Accountant; unit of measure does not affect valuation.