Commissioner Appeals sets aside differential duty demand for goods cleared without MRP display

The Commissioner (Appeals) allowed the appeal, setting aside the differential duty demand. The goods were cleared without MRP display, falling outside the scope of Section 4A. Therefore, the duty paid under Section 4 was deemed appropriate, leading to the dismissal of the Revenue's appeal.

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Issues:
Assessment of duty under Section 4 vs. Section 4A of the Central Excise Act.

Analysis:
The appeal involved a dispute regarding the assessment of duty on baby powder cleared for free distribution. The question was whether the goods were assessable to duty under Section 4 or Section 4A of the Central Excise Act. The respondent paid duty based on the transaction value, while the department contended that duty should be assessed under Section 4A. A show-cause notice was issued for recovery of differential duty, which the original authority confirmed, imposing penalties on the assessee. However, the Commissioner (Appeals) allowed the appeal, setting aside the differential duty demand.

Before the lower appellate authority, the assessee cited previous orders and a Board's Circular to support their case. The Commissioner (Appeals) held that Section 4A applied only when goods were printed with MRP and sold accordingly. Since the MRP on the package in question had been struck out, indicating the goods were cleared without MRP display, duty under Section 4 was accepted, and the demand under Section 4A was set aside.

The appellant tried to distinguish a previous case by pointing out the absence of MRP on the package considered by the apex court. The respondent argued that the goods were cleared without MRP display, exempting them from Section 4A requirements. The respondent also referenced a Tribunal's decision affirming a similar case relied upon by the assessee.

In a separate case involving a different company and product, the Commissioner (Appeals) held the goods assessable under Section 4, which was affirmed by the Tribunal. This decision was accepted by the department, providing additional support to the assessee's case.

The Tribunal found support for the assessee's case in a Supreme Court judgment involving a similar situation where goods were specially packed for free distribution. In the present case, the baby powder was sold to Nestle for free distribution to customers along with their product, Cerelac 400 grams. The goods were cleared without MRP display, falling outside the scope of Section 4A. Therefore, the duty paid under Section 4 was deemed appropriate, leading to the dismissal of the Revenue's appeal.

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