Section 4A RSP cannot be ascertained for clearances between 2003-2008 before notification of 2008 Rules

CESTAT Ahmedabad held that Retail Sales Price (RSP) under section 4A of Central Excise Act, 1944 cannot be ascertained for clearances made between 14.05.2003 and 01.03.2008, prior to notification of the 2008 Rules. The Tribunal ruled that sub-section (4) of section 4A mandates RSP ascertainment only in the "prescribed manner" through rules, and the 2008 Rules are substantive, not procedural, thus cannot be applied retrospectively. Revenue authorities lack power to determine RSP through best judgment method during this period, though goods could still be confiscated for non-declaration or mis-declaration of RSP.

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Issues Involved:
1. Permissibility of ascertaining Retail Sale Price (RSP) for assessments under Section 4A of the Central Excise Act, 1944, for clearances made prior to the notification of the 2008 Rules.
2. Methodology for ascertaining RSP using the best judgment method.
3. Liability of duty if RSP is manipulated fraudulently.

Summary:

First Issue: Permissibility of Ascertaining RSP Prior to 2008 Rules
A Division Bench referred the issue to the Larger Bench due to conflicting decisions in Acme Ceramics and Schneider Electrical. The Tribunal examined the history of Section 4A, noting that prior to the 2008 Rules, the Central Excise Act did not provide a method for ascertaining RSP. The Tribunal concluded that sub-section (4) of Section 4A mandates that RSP must be ascertained in the prescribed manner, which is defined by rules made under the Act. Since the 2008 Rules were notified on 01.03.2008, RSP can only be ascertained from that date. The Tribunal held that any duty collected not in accordance with the prescribed manner would be without authority of law. The Tribunal also noted that the 2008 Rules are not procedural in nature and cannot be applied retrospectively. Consequently, it is impermissible to ascertain RSP for clearances made prior to 01.03.2008.

Second Issue: Methodology for Ascertaining RSP Using Best Judgment Method
The Tribunal observed that the second issue is incidental to the first and would require an answer only if the first issue is answered in the affirmative. Since the first issue was answered in the negative, there was no necessity to address the second issue.

Third Issue: Liability of Duty if RSP is Manipulated Fraudulently
Both the appellant's counsel and the department's special counsel agreed that the third issue does not arise for consideration and should not be answered by the Larger Bench.

Conclusion:
1. It is not permissible to ascertain RSP for clearances made prior to 01.03.2008, as the 2008 Rules came into force on that date.
2. There is no necessity to answer the second question regarding the best judgment method.
3. The third question regarding fraudulent manipulation of RSP is not addressed as it is not relevant to the case.

The papers are to be placed before the Division Bench of the Tribunal for deciding the appeal.

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