Conflicting tariffs

A product if notified by the central government to be charged under MRP basis i.e. section 4A then it has to be charged on that basis, the government will consider all the taxes, freight etc and fix the abatement. Just because you are selling it at a lesser price is not enough reason to choose the normal method of valuation applicable for other products.

when MRP is mentioned on goods then you can allow discounts higher than MRP allowed.

The tariff Code for ball or roller bearings is 8482. This product is not notified under MRP based valuation as per Notification No.49/2008, therefore your product is claissfied under Section 4 Valuation.  If there is a conflict in classification of product under particular tariff, you should go how the product is know in the market. Whether your product is know in the market as ball or roller bearing or Auto Parts, that is most important. If market understanding is that particular product is ball or roller bearing, you should challege with department.

praveen sir, as I and Sunil Sir have mentioned that Bearings fall under classification of 8482 on which duty is charged Ad Valorem @ 12%+cess , however, they are deeming it to be under the head "Parts, components and assemblies of automobiles" which is mentioned in Notification No.49/2008 for MRP based valuation.

@ Sunil Sir, My product is such which is used widely in various industries like machinery, material handling, fans, motors etc apart from auto industry. However, in market around 50% of bearings are sold as Auto component. Does it mean that all the 100% of bearings are deemed to be Auto Component? I am selling to companies which are not automobile companies, and to some traders who deal with auto components, do I always have to take care of what the end use of my product is even though I sell it under 8482 heading which is also mentioned in the invoice?

It is a matter of common experience that the identity of an article is associated with its primary function. It is only logical that it should be so. When a consumer buys an article, he buys it because it performs a specific function for him. There is a mental association in the mind of the consumer between the article and the need it supplies in his life. It is the functional character of the article which identifies in his mind. Better you should go with current classification and challenge.

I remember that i had read about a case where a product is used widely in one or more industries, classifications shall be based on the purchasers. In your case if you can proove that the sales are all to industries other than auto industries then you should be allowed to classify under the heading you are speaking about. But anyways in am not very sure on this though. I will suggest you to get in touch with a excise consultant and take an opinion from them.

Thanks for all the replies and help. There has been a new addition in this case.

There has been an amendment in the notification No.49/2008 CE(NT) on 10th May 2012, which says that valuation of the goods will be done according to the MRP and abatement of 30% will be allowed provided Goods are capable of performing  two or more functions of  items specified at Sl. No. 67 to 101 and 140 to 142

Now, if my product is used as a component in manufacturing any of these items, will I have to pay excise as per MRP?

if yes, I produce 182 sizes of the product, and only a few are used as a component then also do i have to pay as per MRP?

Also, if different sizes are used as components in different items, and no single size is used as component in 2 or more itmes even then I have to pay according to MRP?