Implementation of decision of Hon’ble Supreme Court in case of M/s Fiat India ltd – reg .

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....clarification on implementation of the judgment . The facts in the case of M/s Fiat India Ltd were that the cars were sold at a price substantially lower than the cost of the manufacture and such sales continued for a period of five years . The company admitted that the purpose of such pattern of sale was to achieve market penetration . The Hon'ble Supreme Court held that in such circumstances revenue could reject the transaction value declared under section 4 and invoke the provisions of the Central Excise Valuation ( Determination of Price of Excisable Goods ) Rules , 2000 to assess Central Excise duty . Following clarifications are issued in this regard - Transaction Value below manufacturing cost and profit 2. The first issue is wheth....

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....ost and profit cannot be taken as the sole basis for rejecting the transaction value . Verification of payment of duty 3. The second issue is regarding the procedure to be adopted by the field officers to identify cases where the ratio of the judgment would apply. It may be noted that , under the self-assessment procedure , there is a legal obligation on the assessee to correctly assess and pay the duty in terms of the Central Excise Act , 1944 read with the Valuation Rules , 2000 . Verification of this aspect may be conducted by the Central Excise officer during the audit of units . Aspects such as the percentage of loss at which sale has taken place , the period for which such loss making price has prevailed , reasons for sale at such l....