Excise records to be maintained when finished goods sold to related persons.

[vinay wakde]

We are selling our finished goods to related persons as well as to non-related persons. The value of goods sold to related persons determined as per Rule 10 of the valuation rules i.e. excise duty would be payable on 110% of cost of production of such goods. Notification No. 14/2013 - CE (N.T.) dated November 22, 2013 with effect from 01.12.2013 onwards.

Kindly give your valuable guidance for keeping Excise record to avoid any litigation & to satisfy the Excise auditors during the audit of our unit.

Regards,

VINAY

AI Summary

Related party valuation: obtain a cost accountant certificate certifying the prescribed mark up and retain supporting records.
Related party sales must be supported by a Cost Accountant certificate (CAS 4) certifying the prescribed mark up on cost and by the underlying cost records; auditors may examine the basis of the certificate. CAS 4 should follow cost accounting standards and be obtained when cost structure changes. Engage a cost accountant to determine assessable value and timing of certification. An administrative circular prescribing a different mark up for captive consumption raises a question whether that mark up or the related party provision governs transfers within group units.