TMI Blogvaluation on stock transfer Rule 8 of valuation ruleX X X X Extracts X X X X X X X X Extracts X X X X ..... Dear Member Can any body tell me whether the decision in case of M/s Ispat Industries ltd. Vrs. CCE, Raigad 2007(209) ELT 185 (Tri-LB) has been overruled by any court? In this case the tribunal held that when there is stock transfer for captive consumption as well as sell to independent buyer, Rule 8 of valuation rule will not be applicable for stock transfer case and goods will be valued under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sectin 4(1)(a) i.e. transaction value. Thank You - Reply By Pradeep Khatri - The Reply = In your scenario the principle of 'Greatest Aggregate Quantity' will be applicable which has been defined in the Rule 7 of the Customs Valuation Rule. - Reply By onkar kumar - The Reply = Rule 7 will not be applicable as rule 7 enunciate situation where goods are transferred to 'other place' from w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... here the goods finally sold to an unrelated buyer. i..e selling of goods from some other premises after clearance from the factory. Here case is of stock transfer for captive consumption and this situation has been described in rule 8. Thanks Onkar - Reply By onkar kumar - The Reply = Sorry! Are you talking about Customs valuation Rules, but why Customs valuation would come in this mat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter. Thanks - Reply By Pradeep Khatri - The Reply = I knew that you will raise this question. I make you understand by appended exhibit:- Say, you are 'A' company and also do the stock transfer the 'X' item to their unit @ Rs. 100 for 10 units. But the same X item is also being sold @ Rs. 125 for 20 Units. Therefore, the aboved principal would come to the picture and you would have to pay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the differential duty on the goods removed for captive comsumptionwhich were sent to your other unit. Hence transaction value would be Rs.125/- for 10 units since you are selling the same goods to independent buyer on higher price and quantity. - Reply By onkar kumar - The Reply = Thanks for reply but my question is still unanswered that "Why will Rule 8 be not applicable" i.e 110% of cost of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... production. Like wise Rule 9 and 10 there is no cluase in rule 8 like " goods not sold by an assessee except to or through" Hence partly cleared for captive consumption and partly cleared / sold to independent buyer does not makes immune from 110% valuation for captive consumption. Welcome for comments. Onkar - Reply By Pradeep Khatri - The Reply = Please specify the quanties supplied to I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndependent Buyer as well as quantities supplied to your other unit alongwith the assessable value. - Reply By onkar kumar - The Reply = Assessable value is the same i.e. uniform rate. Quantity approx 40% cleared to other unit of self for further use in manufacture and rest 60% to 4-5 different independent buyer. Thank You - Reply By Pradeep Khatri - The Reply = If the assessable value is sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me for both the parties i.e. own unit and independent buyer, then, there should not be any demand of duty by the department. - Reply By onkar kumar - The Reply = I want to know the provision. Conditions under section 4(1)(a) is not being fulfilled. Fully covered in Rule 8 of valuation Rule. What is the reason for non applicability of rule 8 of valuation rule in this type of case? - R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eply By onkar kumar - The Reply = I want to know the provision. Conditions under section 4(1)(a) is not being fulfilled. Fully covered in Rule 8 of valuation Rule . Wht is the reason for non applicability of Rule 8 of valuation Rule in this type of case? Thank You - Reply By JAMES PG - The Reply = The same decision has been upheld in Gangotri Electrocastings Ltd Vs CCE, Patna o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 17th April,2012 - Reply By vijay kumar - The Reply = Apparently, the said decision of the Larger Bench of Hon'ble CESTAT has not been overruled, but rather has been consistently followed in other cases like Daman Ganga ang Gangotri Electrocastings. The reason is - in the opinion of the Tribunal, Rule 8 cannot be applied when part of the goods are sold to independent buyers. In other words, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t would be applicable only when the goods are exclusively transferred to its own unit, though the wording is not so. In any case, it was opined that among Rule 4 and Rule 8 , the former comes first sequentially and more than that, it is closest in spirit to Section 4 . Thus, it has to be understood that where a particular item is partly stock transferred and partly sold to independent buyers, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rules 4 should be applied for the former. If such item is exclusively transferred to own units, Rule 8 will be applicable. It may be noted that in Rule 9 , there is a provision of "except to or through a related person", where there is no ambiguity. - Reply By Pradeep Khatri - The Reply = M/S. GANGOTRI ELECTROCASTINGS LTD. Versus COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX, PATNA - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Reply By onkar kumar - The Reply = Thanks for reply - valuation on stock transfer Rule 8 of valuation rule - Query Started By: - onkar kumar Dated:- 17-10-2012 Central Excise - Got 14 Replies - Central Excise - Discussion Forum - Knowledge Sharing, reply post by an expert, personal opinion Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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