XYZ Ltd., sold machinery to ABC at a price of ₹5 lacs on 18th August, 2016 which was removed from its factory at Jaipur. The rate of excise duty applicable is 12.36% on the date of removal. ABC refused to take delivery o
CS Professional · Advanced Tax Laws and Practice · PYQS · June 2017
XYZ Ltd., sold machinery to ABC at a price of ₹5 lacs on 18th August, 2016 which was removed from its factory at Jaipur. The rate of excise duty applicable is 12.36% on the date of removal. ABC refused to take delivery of the machine when it reached destination. Meanwhile XYZ Ltd. increased the price of the same type of machinery to ₹6 lacs with effect from 19th August, 2016. The machinery as refused to by ABC has been sold on 26th August, 2016 to Mr. Lal at the revised price of ₹6 lacs. The excise duty including education cess applicable when the machine was sold to Mr. Lal was 15.45%. Explain the following with reasons: (i) What value is to be taken as assessable value?
Answer & Explanation:
The price prevailing at the time of removal of goods from the factory i.e. on 18th August, 2016 ₹5 lakhs is the assessable value.
Topics: Central Excise Law
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