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

Valuation of automobile parts: MRP applies for retail sale; cost based valuation applies for transfers used in manufacture.
Where parts are in retail packing and intended for sale to the ultimate consumer valuation is by MRP; where goods are not sold but used by the assessee in production the value is determined with reference to cost of manufacture with an uplift, and costing must be performed in accordance with CAS 4.