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Section 4. Valuation of excisable goods for purposes of charging of duty of excise. The duty of excise is chargeable on any excisable goods with reference to their value, then, on each removal of the goods, such value shall - (a) in a case where the goods are sold by the assessee, for delivery at the time and place of the removal, the assessee and the buyer of the goods are not related and the price is the sole consideration for the sale, be the transaction value; (b) in any other case, including the case where the goods are not sold, be the value determined in such manner as may be prescribed. Section 4A. Valuation of excisable goods with reference to retail sale price. The goods shall be covered under provisions of Standards of Weights and Measures Act or Rules. Central Govt. has to issue a notification in Official Gazette specifying the commodities to which the provision is applicable and the abatements permissible. Central Govt. can permit reasonable abatement (deductions) from the retail sale price. While allowing such abatement, Central Govt. shall take into account excise duty, sales tax and other taxes payable on the goods. The ?retail sale price? should be the maximum price at which excisable goods in packaged forms are sold to ultimate consumer. It includes all taxes, freight, transport charges, commission payable to dealers and all charges towards advertisement, delivery, packaging, forwarding charges, etc. If under certain law, MRP is required to be without taxes and duties, that price can be the ?retail sale price. If more than one ?retail sale price? is printed on the same packing, the maximum of such retail price will be considered. If different MRP are printed on different packages for different areas, each such price will be ?retail sale price? for purpose of valuation. Tampering, altering or removing MRP is an offense and goods are liable to confiscation. If price is altered, such increased price will be the ?retail sale price? for the purpose of valuation. Rule 8: In case of captive consumption valauation should be done as follows: Captive consumption means goods are not sold but consumed within the same factory or another factory of same manufacturer (i.e. inter-unit transfers). In case of captive consumption, valuation shall be done on the basis of cost of production plus 10% Direct material cost + Direct labour cost + Direct expenses = Prime Cost Prime Cost + Production Overheads + Administration Overheads + R&D Cost (Apportioned) = Cost of Production