Mahesh Engineers Ltd. removed goods from their factory at Kanpur on 20th April, 2015 for sale from their depot at Baroda. On that date, the normal transaction value of goods at Kanpur factory was ₹35,000 while normal tra

Rule 7 of the Central Excise (Determination of price of Excisable Goods) Rule, 2000 interalia, provides that where excisable goods are not sold at the factory gate but are transferred to a depot, the assessable value for the goods cleared from factory is the normal transaction value of such goods at the depot or about the same time at which the goods as being valued are removed from the factory or warehouse. In the given case, ₹35,000 represents value on 20.04.2015 (time of removal) at Kanpur factory, but it is not the value prevalent at the depot. Similarly, ₹39,000 represents depot price, but it is not the price prevalent on 20.04.2015 (time of removal). The correct value to be adopted in this case is the depot price of such goods (normal transaction value) on 20.04.2015. ie. ₹33,000. Further, the applicable rate of duty shall be the rate of duty in force on the date when such goods are removed from the factory. Hence, the correct rate of duty will be 12%. Thus, the Department's claim is not correct in the instant case.