Business Sucess

F.No. 6/10/ 2009-CX.1
Government of India
Ministry of Finance
Department of Revenue
Central Board of Excise and Custom

New Delhi, the 20th October 2009

To,

All the Chief Commissioner of Central Excise including LTU,

All Commissioners of Central Excise including LTU,

All Director Generals

Sir,

Subject: Assessable value in respect of goods manufactured on Job-work- Scope of Rule 10A of the Central Excise Valuation (Determination of price of Excisable goods) Rules, 2000 -reg

It has been brought to the notice of the Board that some manufacturers of Motor Vehicles are getting complete Motor Vehicles manufactured by sending the Chassis of the Motor Vehicles to independent body builders for building the body as per the design/specification of the manufacturer. The practice followed is that the Chassis is transferred to the Body builder on payment of appropriate Central Excise duty on stock transfer basis and is not sold to them. The body builder avails the Cenvat Credit of the duty paid on the chassis and clears the same on payment of duty to the Depot/Sales Office/Distributer of the Motor Vehicle manufacturer. The duty is discharged by the body builder on the assessable value comprising the value of Chassis and the job charges. The Depot/Sales office of the MV manufacturer sells the vehicles at a higher price than the price on which duty has been paid. Similar practice may be prevailing in respect of other commodities also.

2. The matter has been examined. Rule 10A (ii) of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 stipulates that where the excisable goods are produced or manufactured by a job-worker, on behalf of a principal manufacturer, then in a case where the goods are not sold by the principal manufacturer at the time of removal of goods from the factory of the job-worker, but are transferred to some other place from where the said goods are to be sold after their clearance from the factory of job-worker, and where the principal manufacturer and buyer of the goods are not related, and the price is the sole consideration for the sale, the value of the excisable goods shall be the normal transaction value of such goods sold from such other place at or about the same time.

3. A plain reading of the aforesaid provision of law makes it clear that the assessable value for the purpose of charging Central Excise duty, in the cases where the Job-worker transfer the excisable goods to the Depot/Sale office/Distributer and/or any other sale point of the principal manufacturer, shall be the transaction value on which goods are sold by the principal manufacturer from such a place. Accordingly, after the insertion of Rule 10 A, the practice of discharging the duty on cost construction method by the body builder is not legally correct. It is, therefore, clarified that wherever goods are manufactured by a person on job work basis on behalf of a principal, then value for the purpose of payment of excise duty may be determined in terms of the provisions of Rule 10 A of the Central Excise Valuation (Determination of price of Excisable goods) Rules, 2000 subject to fulfilment of the requirements of the said rule. It is requested that the practice followed in your zone may be verified for body builders of motor vehicles and/or other commodities, which are manufactured on job work basis to ensure that duty is paid correctly as per Rule 10A wherever required.

4. Trade and Industry may be informed.

5. Receipt of this circular may be acknowledged.

6. Hindi version would follow.

Yours faithfully,

(Madan Mohan)

Under Secretary to the Govt. of India

[TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUB-SECTION (i)]

Government of India

Ministry of Finance

(Department of Revenue)

Notification No. 14/2009-Central Excise (N.T.)

New Delhi the 10^th June, 2009

G.S.R.  (E).- In exercise of the powers conferred by section 37 of the Central Excise Act, 1944 (1 of 1944), the Central Government hereby makes the following rules further to amend the Central Excise (Removal of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 2001, namely:-

1. (1) These rules may be called the Central Excise (Removal of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Amendment Rules, 2009.

(2) They shall come into force from the date of their publication in the official Gazette.

2. In the Central Excise (Removal of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 2001, –

(a) in rule 6, for the words “Where the subject goods are not used”, the words “The said Assistant Commissioner or Deputy Commissioner shall ensure that the goods received are used by the manufacturer for the intended purpose and where the subject goods are not used” shall be substituted;

(b) For Annexure-II, the following Annexure shall be substituted, namely:

“Annexure II

Monthly Return (See rule 5)

Name of subject goods

Note – Separate entries should be made for each variety or class of goods used and manufactured.

I/We declare that I/we have compared the above particulars with the records (and) /books of my/our factory and that they are, insofar as I/we can ascertain complete.

Verified

Date:

Place:

Signature of manufacturer

Name in capital letters

Seal”

[F.No.201/30/2008-CX 6]

(Mallika Arya)
Director, Central Excise

Note: The principal rules were published in the Gazette of India part II, Section 3, Sub-section (i) vide notification No. 34/2001-CE (NT) dated the 21^st June, 2001[G.S.R. 448(E) dated the 21st June, 2001] and were last amended vide notification No. 37/2003-CE(NT) dated 17^th April, 2003[G.S.R. 339 (E) dated 17^th April, 2003.]

GOVERNMENT OF INDIA

MINISTRY OF FINANCE

(DEPARTMENT OF REVENUE)

New Delhi, the 24^th February 2009

Notification No. 4/2009 – Central Excise

G.S.R. (E).- In exercise of the powers conferred by sub-section (1) of section 5A of the Central Excise Act, 1944 (1 of 1944), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby directs that each of the notifications of the Government of India in the Ministry of Finance (Department of Revenue), specified in column (2) of the Table hereto annexed shall be amended or further amended, as the case may be, in the manner specified in the corresponding entry in column (3) of the said Table, namely :-

TABLE

[F. No.354/210/2008-TRU (Part)]

[Unmesh Sharad Wagh]
Under Secretary to the Government of India

Note. -

(1)        The principal notification No.3/2006-Central Excise, dated the 1^st March, 2006 was published in the Gazette of India, Extraordinary, part II, section 3, sub-section (i) vide number G.S.R.93 (E), dated the 1st March, 2006, and was last amended by notification No. 58/2008-Central Excise, dated the 7^th December, 2008 published vide number G.S.R. 840(E), dated the 7^th December 2008.

(2)        The principal notification No.4/2006-Central Excise, dated the 1^st March, 2006 was published in the Gazette of India, Extraordinary, part II, section 3, sub-section (i) vide number G.S.R.94 (E), dated the 1st March, 2006, and was last amended by notification No. 64/2008-Central Excise, dated the 24^th December, 2008 published vide number G.S.R. 887(E), dated the 24^th December, 2008.

(3)        The principal notification No.5/2006-Central Excise, dated the 1^st March, 2006 was published in the Gazette of India, Extraordinary, part II, section 3, sub-section (i) vide number G.S.R.95 (E), dated the 1st March, 2006, and was last amended by notification No. 58/2008-Central Excise, dated the 7^th December, 2008 published vide number G.S.R. 840(E), dated the 7^th December 2008.

(4)        The principal notification No.6/2006-Central Excise, dated the 1^st March, 2006 was published in the Gazette of India, Extraordinary, part II, section 3, sub-section (i) vide number G.S.R.96 (E), dated the 1st March, 2006, and was last amended by notification No. 58/2008-Central Excise, dated the 7^th December, 2008 published vide number G.S.R. 840(E), dated the 7^th December 2008.

(5)        The principal notification No.2/2008-Central Excise, dated the 1^st March, 2008 was published in the Gazette of India, Extraordinary, part II, section 3, sub-section (i) vide number G.S.R.130 (E), dated the 1^st March, 2008, and was last amended by notification No. 58/2008-Central Excise, dated the 7^th December, 2008 published vide number G.S.R. 840(E), dated the 7^th December 2008.

NEW DELHI: Companies cannot be subjected to service tax for renting premises to run their businesses,the Delhi High Court has ruled while disposing of petitions filed by some retailers against a government directive.

The court struck down Centre’s notification, by which renting of immovable property for use in the course of business was brought within the ambit of service tax.

“We hold that law

does not in terms entail that renting out of immovable property for use in the course of furtherance of business or commerce would by itself constitute a taxable service and be eligible to service tax,” Justice B D Ahmed said.