Ministry of Finance
Department of Revenue
Central Board of Excise of Revenue & Customs
North Block, New Delhi
Dated: 8.10.2009
Circular No. 901/21/2009-CX
To
Chief Commissioner of Central Excise (All)
Commissioner of Central Excise (All)
Chief Departmental Representative, CESTAT.
Sir,
Sub: Valuation of SKO(PDS), LPG and other goods under Transaction Value System
from 01.07.2000.
Attention is invited to the Supreme Court decision in the case of Civil Appeal
No. 432/2008 in the case of MRPL regarding valuation of SKO (PDS) and LPG
(domestic) for the period 01.07.2000 onward. The Hon’ble Supreme Court in this
case has dismissed the department’s civil appeal observing that the issue
involved was covered by CBEC Circular No. 563/59/2000-CX. dated 21.12.2000.
- The issue was discussed by the Board. The Board has decided that department
should contest the said decision in respect of other appeals which are being
filed before the Hon’ble Supreme Court on the identical issue. The Board in BMB
No.52/2009 has also directed that the field formations should transfer the cases
on this issue to the call book for all pending adjudication cases and wherever
the orders have been passed by the adjudicating authority or by appellate
authority, the field formation should file appeal against the said order. Board
also directed that proper briefing should be made by Commissioners to the DRs in
all cases pending before the Tribunal. The DR should also strongly put forward
the department’s stand that the circular referred by the Supreme Court was
issued in the context of erstwhile Section 4 and the provisions of new Section
are entirely different. Moreover, the said circular was issued in the context of
a specific issue where the Supreme Court has asked the Ministry of Finance and
Ministry of Petroleum to sort out the issue. The said circular was not binding
for any other case. It is, therefore, requested that the field formation should
transfer the cases to call book where notices are pending for adjudication and
should file the appeal wherever the cases had been decided.
-2-
- Attention is also invited to recent Supreme Court judgment in the case of
Grasim Industries (C.A. No.3159/2004). In this case the Supreme Court has
referred three questions for consideration of the Larger Bench and one of the
question is whether the concept of transaction value under new Section 4 has
made any material departure from deemed normal price concept of erstwhile
Section 4(1)(a) of the Act. As the issue involved in the case of valuation of
SKO/LPG is also on similar ground, therefore, while filing the appeal or arguing
the case before the Tribunal/Court etc., this aspect must be brought to the
notice of the appellate authority/court and request them to keep the decision
pending till the Larger Bench of the apex court decides the aforesaid issue.
- If there are some other disputes relating to valuation under present Section
4 and if the decision/order/instruction given in context of old Section 4 is
being cited and it is felt that the said decision/order etc. is not applicable
to the present Section 4, in that case also the decision in the case of Grasim
Industries may be kept in mind for the action as mentioned above in the case of
SKO/LPG.
Yours faithfully,
(Madan Mohan)
Under Secretary to the Government of India.
F.No.6/1/2009-DS(CX.1/IV)
Copy to – All Director Generals (Audit, Inspection, CEI).
(Madan Mohan)
Under Secretary to the Government of India.