Valuation-Central Excise-Spare Parts Division

[Sanjay Sharma]

“A” company purchase the material from “B” company and “B” Co.  repack and labels it and fix the MRP before removed the said goods to “B’ co.’s customers.

 While shipping the said goods “A” company charges the excise duty on” Transaction value” if it is direct from their manufacturing unit and on their MRP if it is from their Spare Parts Division.

 Query- Why should “B” Co.  charge the Excise duty on their MRP basis while I have to pack, re-pack or re-label it,  and then discharge the excise duty on our MRP to the ultimate consumers in the retail market. Pls. enlighten us what is the correct position of law in this regard.

 

Best Regards,

Sanjay Sharma

AI Summary

MRP-based valuation applies when goods are retail packed or MRP is altered; industrial clearances use transaction value.
Repacking or relabeling that alters retail sale price constitutes deemed manufacture and, when goods are packed for retail with an affixed MRP, excise duty is to be valued on that MRP; increases in declared RSP can determine the RSP for goods removed within a specified period and the highest RSP prevails where multiple prices exist. Conversely, clearances to industrial or institutional consumers that are not retail packed should be assessed on transaction value and are excluded from the packaged commodity retail obligations of Legal Metrology.