Circular No. 749/65/CX-2003
26^th September, 2003 

F. No. 387/67/99-JC
Government of India
Ministry of Finance
Department of Revenue
Central Board of Excise & Customs
Judicial Cell, North Block, New Delhi

Subject: - Valuation of goods for Central Excise Purposes – cum duty price 

            Kind attention is invited to the judgment dated 26-02-2002 of the Hon’ble Supreme Court in the case of CCE, Madurai vs T.V.S. Srichakra Ltd. and the judgment dated 27-02-2002 in the case of CCE, Delhi Vs Maruti Udyog Ltd. [2002 (141) ELT 3 (SC)].  Vide the said judgment, appeals filed by the Department were dismissed by the Hon’ble Supreme Court, upholding that the sale price realised by the assessee is to be regarded as inclusive of excise duty and therefore, in arriving at the excisable value of the goods, the element of duty which is payable is to be excluded. 

            In this regard, it is to be informed that against the above said judgments of the Hon’ble Supreme Court, Review Petitions have been filed by the Department and the Hon’ble Supreme Court has ordered for issue of notice.  It is therefore, requested that the cases pending for adjudication and remanded on this issue may be kept pending in the Call Book till the decision of the Hon’ble Supreme Court on the Review Petition filed by the Department.  Accordingly, if any, adverse decision of any appellate authority on this issue comes in the meanwhile, the same will need to be appealed against. 

            Though vide section 136 of the Finance Act, 2003, Section 4 of the Central Excise Act has been amended by insertion of an Explanation to Section 4(1) to the effect that the price-cum-duty shall be deemed to include the duty payable on the goods, Board has taken a view that the amended provision will apply only prospectively and the old cases will have to be pursued as per the provisions of law prevailing at the relevant time. 

            It is requested that the contents of this Circular may be brought to the notice of all the Commissioners under your charge for necessary action at their end.

Sungita Sharma
Director (Review)