Central Excise - Valuation - Meaning of Normal Price where the goods are sold at different prices to different buyers of the same class - Regarding - Central Excise - 3/90-CX.1

Central Excise - Valuation - Meaning of Normal Price where the goods are sold at different prices to different buyers of the same class - Regarding Circular No. 3/90-CX.1 Dated 25-1-1990 [From F. No. 6/5/90-CX.1] Government of India Ministry of Finance (Department of Revenue) Central Board of Excise and Customs, New Delhi Subject : Central Excise - Valuation - Meaning of Normal Price where the goods are sold at different prices to different buyers of the same class - Regarding. I am directed to refer to Board's Letter F.No. 315/18/76-CX.10/CX.1 dated 30th July, 1976 - Circular No. 8/76-C.F.V. where in it was clarified that dealers in a particular region or an industrial consumer could be considered as a class of buyer to whom goods are sold under contract, at different prices, if such is the normal practice of trade and in such cases, the different prices to each such class of buyers will be the normal price, if the other ingredients of the price exist. 2. In the context of above referred circular, a doubt was raised (i) whether regional sales depots located in different parts of the country could be treated as different classes of buyers and whether different prices could be taken as assessable value for levy of duty even if normal price at the factory gate is known; and (ii) whether dealers in different regions can be regarded as different classes of buyers. 3. The Board took note of Section 4 of the Central Excises and Salt Act, 1944 as well as, the decision of the Bombay High Court in the case of M/S. Godrej and Boyce Manufacturing Co. Ltd. and felt that in the light of the above wholesale dealers in India could not be considered as belonging to different classes simply because they are located in different towns or cities. 4. The Board also felt that in the case of regional sales depots, there was only a transfer of goods and there was no question of sales as such, these regional sales depots could not be treated as different classes of buyers. It was felt that factory gate price could apply provided it is a genuine price. 5. Accordingly, it has been decided by the Board that the whole-sale dealers in India cannot be considered as belonging to different classes simply because they are located in different places. 6. Similarly in case of transfer of goods to regional sales depots, factory gate price will apply provided it is a genuine price. 7. The Board's Circular No. 8/76 C.F.V., in F.No. 315/18/ 76-CX.10/CX.1 dated 30-7-1976 is modified to the extent discussed above. 8. Filed formations may be informed suitably. Please acknowledge receipt of this circular.