2013 (6) TMI 364 - AT - Central Excise

Tribunal rules in favor of manufacturer in central excise duty dispute over TV sets

CCE, Chandigarh Versus Oscar Marketing Company (P) Ltd.

The Tribunal upheld the Commissioner (Appeals) decision, ruling in favor of the respondent manufacturer in a dispute over central excise duty on colour ... MRP based valuation - Revenue’s contention is that some of the dealers were ultimately selling these television sets on MRP higher than affixed by the respondent. - The contention of the appellant is that out of 100 dealers and clearance of about 1000 TVs, only 40-45 TVs were sold only by two dealers in reference by charging higher price than MRP, the same cannot be made a leading evidence to conclude that appellant is charging higher price than MRP, and the amount charged in excess by dealer has never been passed to the appellant which has not been alleged in the order in original. Held that:- This case is squarely covered in the case of M/s Videocon International Ltd. vs. C.C.E. [2004 (3) TMI 111 - CESTAT, MUMBAI] held that the six instances cannot be made the leading evidence so as to conclude that the appellant was charging more prices from their customers than the one declared by them when there were around more than 12,000 dealers. The Hon’ble Tribunal further observed that there are no averment in Show Cause Notice that the extra amount collected by the dealer has flown back to the appellant. - Demand set aside - Decided in favor of assessee. Issues:1. Dispute over central excise duty on colour television sets based on MRP.2. Allegation of dealers selling television sets at a higher price than the declared MRP.3. Liability of the manufacturer for the differential duty.4. Interpretation of the Weights & Measures Act and the Central Excise Act regarding pricing.5. Application of the decision in the case of M/s Videocon International Ltd. vs. C.C.E. 2004 (167) ELT 33 (Tri-Mumbai).Issue 1: Dispute over central excise duty on colour television sets based on MRP.The respondents were manufacturing colour television sets subject to central excise duty based on the MRP price affixed to the sets. The dispute arose regarding the interpretation of the MRP and whether subsequent expenses incurred by dealers should be included in the MRP calculation.Issue 2: Allegation of dealers selling television sets at a higher price than the declared MRP.Revenue alleged that some dealers sold television sets at prices higher than the declared MRP. This led to the initiation of proceedings against the manufacturer for the payment of differential duty based on the sales made by these dealers.Issue 3: Liability of the manufacturer for the differential duty.The original adjudicating authority confirmed the demand for the payment of differential duty and imposed a penalty on the manufacturer. However, on appeal, the Commissioner (Appeals) ruled in favor of the respondent, stating that the responsibility for selling above the MRP lay with the dealers, not the manufacturer.Issue 4: Interpretation of the Weights & Measures Act and the Central Excise Act regarding pricing.The Commissioner (Appeals) highlighted that the dealers' actions of selling above the MRP constituted an offense under the Weights & Measures Act, not the Central Excise Act. The manufacturer had provided sufficient margins for dealers, and there was no evidence that excess amounts collected by dealers were passed back to the manufacturer.Issue 5: Application of the decision in the case of M/s Videocon International Ltd. vs. C.C.E. 2004 (167) ELT 33 (Tri-Mumbai).The Revenue contested the applicability of a previous tribunal decision, arguing that the percentage of sales above MRP in this case was higher than the cited case. However, the Tribunal upheld the Commissioner (Appeals) decision, emphasizing that the manufacturer did not direct dealers to sell above the MRP and that the majority of sales adhered to the declared MRP.In conclusion, the Tribunal rejected the Revenue's appeal, affirming the Commissioner (Appeals) decision that the manufacturer was not liable for the actions of dealers selling above the declared MRP, as there was no evidence of the excess amounts flowing back to the manufacturer.