2003 (12) TMI 355 - AT - Central Excise

MRP crucial for Excise Duty valuation, Tribunal rules duty demands lacked legal basis

HINDUSTAN COCA COLA BEVERAGES P. LTD. Versus COMMR. OF C. EX., ALLAHABAD

HINDUSTAN COCA COLA BEVERAGES P. LTD. Versus COMMR. OF C. EX., ALLAHABAD - 2004 (164) E.L.T. 223 (Tri. - Del.) Issues:Valuation of goods for central excise duty based on MRP declaration; Duty demand raised for clearances based on revised MRPs; Interpretation of Section 4A(2) of the Central Excise Act; Application of the decision of the Hon'ble High Court of Karnataka in a similar case.Analysis:The case involved M/s Hindustan Coca Cola Beverages Pvt. Ltd., which manufactures aerated water subject to central excise duty based on the ad valorem basis and specified under Section 4A of the Central Excise Act. The goods were required to be valued for excise duty purposes based on the Maximum Retail Price (MRP) affixed on them, with a percentage of deduction allowed on the MRP as notified. The assessable value for levy of duty was determined based on this MRP.The appellant filed a declaration under rule 173C(2A) to inform the Central Excise authorities about the change/revision of MRP on certain goods. However, duty demands were raised for clearances of goods based on the revised MRPs, alleging that duty had not been paid according to the declared MRPs. The appellant argued that they correctly discharged duty based on the MRPs affixed on the goods, even if a revision was made post-clearance, as per the legal provisions of Section 4A(2) of the Act.The Tribunal reviewed the submissions and referred to the Karnataka High Court's judgment, highlighting that the retail sale price declared on the goods should be considered for valuation under Section 4A(2). The Court emphasized that the declaration under rule 173C(2A) does not determine the liability and that the retail sale price declared on the packages is crucial for valuation. In this case, the valuation was in line with the MRP declared on the goods, and no short-levy occurred. Therefore, the duty demands lacked legal basis and were quashed, leading to the allowance of the appeals.The decision underscored the importance of valuing goods for excise duty purposes based on the MRP declared on the products, as stipulated under Section 4A(2) of the Central Excise Act. The judgment also reinforced the interpretation that the retail sale price declared on the packages is fundamental for determining the assessable value, aligning with the legal position established by previous court rulings.