2008 (8) TMI 234 - AT - Central Excise

Tribunal excludes Notification No. 20/2001 for retail prices, upholds duty demand

The Tribunal ruled that Notification No. 20/2001 does not apply when there is no requirement to declare retail sale prices. Transactions with Doon School ... Valuation - applicability of Notification No. 20/2001 – impugned bulk clearances made by the party by discharging the duty liability at 60% of the retail sale price as Notification No. 20/01 fixes tariff value in respect of the ready-made garments at 60% of the Retail sale price - Revenue contend that there is no requirement under the under the Standards of Weights and Measures Act, for declaring the MRP on the packages, therefore, Notification No. 20/2001 would not at all be applicable – revenue’s contention is acceptable - Held that notification 20/2001 fixing the tariff Value would not be applicable Issues involved:Applicability of Notification No. 20/2001 dated 3-4-2001 in respect of clearances of ready-made garments made by the party to specific entities and for annual sale clearances.Analysis:1. The issue revolves around the interpretation of Notification No. 20/2001, which fixes the tariff value for articles of apparel not knitted or crocheted. The party contends that they declared the retail sale price to the Department, relying on the notification. However, the Department argues that for the bulk clearances undertaken by the party, there is no requirement to declare the maximum retail sales price under the Standards of Weights and Measures Act, 1976. The Tribunal agrees with the Revenue's stand that in the absence of the requirement to declare MRP, the benefit of the notification cannot be applied to such transactions, justifying the demand for differential duty. The penalty imposed is set aside due to the issue being a matter of interpretation. The Tribunal upholds the duty demand but removes the penalty.2. The Commissioner (Appeals) allowed the benefit of the notification in respect of supplies made to Doon School, which the Revenue objected to. The Revenue argued that the conditions stipulated in the explanation to the notification regarding 'Retail Sale Price' were not met as the clearances to Doon School were in bulk quantities, and there was no retail sale involved. The Tribunal concurs with the Revenue that the notification is not extendable to supplies made to Doon School due to the bulk nature of the purchases. Consequently, the decision of the Commissioner (Appeals) is deemed incorrect, and the Revenue's appeal is allowed by restoring the Order-in-Original regarding the duty demand. The party's appeal is partially allowed by setting aside the penalties.3. The party also argued that the notification simply fixes the tariff value, and a retail transaction is not a prerequisite for benefiting from it. They contended that the transactions with Jet Airways and for annual sales are retail transactions as per the Standards of Weights and Measures (Packaged Commodities) Rules, 1977. Additionally, they highlighted that the notification is issued under Section 3(2) of the Central Excise Act, not Section 4A as alleged in the show cause notice. The Tribunal, however, emphasizes that the absence of a requirement to declare MRP under the applicable Act renders the notification inapplicable to the transactions, supporting the Revenue's stance.4. In conclusion, the Tribunal rules that Notification No. 20/2001 fixing the tariff value is not applicable when there is no requirement to declare the retail sale price on the packages. Therefore, the transactions involving Doon School are not covered by the notification due to being bulk purchases. The duty demand is upheld, penalties are set aside, and the Revenue's appeal is allowed while partially allowing the party's appeal.(Pronounced in open Court on 26-8-2008)