Dayal R Kundani
Implementation of Supreme Court Decision-case of Fiat India Ltdby CBEC vide Circular No. 979/03/2014-CX dated 15-01-2014
CBEC issued Circular No. 979/03/2014-CX dated 15-01-2014 clarifying implementation of Supreme Court Decision in the case of Fiat India Limited.
Through this Circular CBEC Clarifies as under on Implementation of FIAT Ruling:
Facts of each case to be considered
(i) company switching over business and
(ii) where goods could not be sold within reasonable time]
Guidelines [mandate] for verification by Excise officers
1. The Circular has laid down the broad procedure /parameters to be adopted by the Excise officers during the audit of units. The following key aspects may be looked into by audit party for determining whether the facts are similar to the facts and circumstances of Fiat case:
2. The Cost Accounting Standard – 4 (“CAS–4”) may be adopted for computing manufacturing costs. A certificate from a Cost Accountant / Chartered Accountant should normally be accepted and special cost Audit or summoning of cost data to be adopted in exceptional cases
Applicability of FIAT Ruling for past periods
|For the period prior to August 29, 2012 (date of Fiat judgment)||Extended period of limitation not to be invoked only on the basis of Fiat Ruling|
|For the period after August 29, 2012||Declaration of transaction value (as assessable value) in case of facts similar to Fiat Ruling would be considered as willful mis-statement of assessable value.|
Please note that it is very important Circular and one really needs to verify aspect of cost and sale prices of products. In case the sale prices are less than cost, We need to verify and have analysis based on the said aspect. It is advised to keep such analysis on continues basis as it may be now one of the mandatory requirement for Central Excise and even for Statutory Audit as well.
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