2014 (3) TMI 664 - AT - Central Excise

Tribunal rules in favor of manufacturers over excise duty calculation dispute

JYOTHI LABORATORIES LTD. Versus COMMISSIONER OF CENTRAL EXCISE, SALEM

JYOTHI LABORATORIES LTD. Versus COMMISSIONER OF CENTRAL EXCISE, SALEM - 2013 (295) E.L.T. 314 (Tri. - Chennai) Issues:1. Assessment of excise duty on the basis of combined MRP of two products.2. Interpretation of Section 4A of the Central Excise Act.3. Application of a previous Tribunal decision to the current case.Analysis:1. The appellants, manufacturers of detergent powder and a whitening product, faced a demand of Rs. 62,405/- for the period from April 2009 to September 2009. The Revenue believed that the Maximum Retail Price (MRP) of the whitening product should be added to the MRP of the detergent powder for excise duty assessment under Section 4A of the Act. The appellants argued that the whitening product was not manufactured at the assessed factory, and even if given free with detergent, its MRP should not be added for excise duty calculation.2. The counsel for the appellants contended that since the whitening product was not packed along with the detergent powder and was not sold at a separate price, the MRP of the detergent powder alone should be considered for excise duty valuation under Section 4A. The Tribunal noted that the previous decision cited by the Revenue involved products packed together, unlike the current case. As the products were not packed together, the Tribunal found no justification for adding the MRP of both products for excise duty calculation. Consequently, the Tribunal granted a waiver of pre-deposit of the dues and stayed its collection during the appeal process.3. The learned AR for Revenue relied on a Tribunal decision in the case of CCE, Belapur v. Nandan Petrochem Ltd. The Tribunal distinguished this case from the present one, highlighting that the previous case did not pertain to products assessed under Section 4A of the Act and involved packed products. Since the products in the current case were not packed together, the Tribunal found the Revenue's approach unjustified and granted relief to the appellants by waiving the pre-deposit requirement and staying the collection of dues pending appeal.This judgment clarifies the application of Section 4A of the Central Excise Act regarding excise duty assessment based on the MRP of products, emphasizing the importance of considering the specific circumstances of each case, especially regarding the packaging and pricing of goods.