Valuation of Automobiles part

[Sanjay Sharma]

We manufacturing Tractors for agriculture purpose as well as supplying the Tractor Parts to our customers from our Spare Parts Division situated in the same premises on one registration no. in Central Excise Department from 1st June-06 under cover the notification No. 14/2008-C.E.(N.T.), dated 1.03.08. Tractor is exempted for the payment of Excise duty and the “Parts, components and assemblies of any automobiles “are liable to pay the duty.

We are paying the excise duty on MRP basis as the automobiles parts are covered in the Third schedule of Central Excise Act, 1944 and,

 At the same time we are having a another separate assembly unit in a out side location from our existing premises.

Question is this –

 We have to sent the parts from our spare parts division to this outside location of ours unit, what would be the valuation pattern for the payment of excise duty?  Would it be on MRP basis or Transaction value or some thing else,  pls.  clarify with supporting regulation, rules and Case laws, if any.

 Regards.

AI Summary

Debate Over Excise Duty: Should Automobile Parts Be Valued on MRP or Transaction Value? Rule 8 Considered. A discussion on the valuation of automobile parts for excise duty purposes involves a manufacturer of tractors and spare parts. The issue centers on whether excise duty should be calculated on the Maximum Retail Price (MRP) or transaction value when parts are sent from a spare parts division to an external assembly unit. One participant suggests MRP-based valuation according to valuation rules, while another argues that MRP applies only to retail sales, not industrial use, per the Standards of Weights and Measures Rules 1977. Another participant cites Rule 8 of the Central Excise Valuation Rules, 2000, suggesting a valuation at 110% of the manufacturing cost for non-sold goods.