2016 (12) TMI 975 - AT - Central Excise

Tribunal Upholds Revenue's Appeals Dismissal, Affirms Section 4A Valuation for Industry Sales

Commissioner of Central Excise, Pune-III Versus Whirlpool of India Ltd

The Tribunal upheld the Supreme Court's decision and dismissed the Revenue's appeals, following established legal principles regarding the valuation of ... Valuation - under section 4A of the Central Excise Act, 1944 or under Section 4 of the Act - manufacture of excisable goods viz Washing Machines, Air Conditioners, Refrigeration etc. falling under Chapter 84 of the Central Excise Tariff Act, 1985 - The said Refrigerators were not sold in the open market and were made specifically for use by M/s Coca-Cola India Pvt Ltd, M/s Hindustan Coca-Cola and their dealers. On the body of the said Refrigerators stickers showing trade name of Coca-Cola were also pasted on one or more side. The assessee cleared such Refrigerators to M/s Coca-Cola India Pvt Ltd, M/s Hindustan Coca-Cola and their dealers directly from the factory and also through their Branch Offices located in various cities. Held that: - we find that the issue in the appeal is no longer res intergra and has been settled in favour of the assessee in the judgment of Hon’ble Supreme Court in the case of Jayanti Food Processing Pvt Ltd. vs. CCE [2007 (8) TMI 3 - Supreme Court] where the Hon'ble Apex Court held that these cases would be governed by the decision of the Tribunal in ITEL Industries Pvt. Ltd. vs. CCE [2003 (10) TMI 140 - CESTAT, BANGALORE] in which case the sale of telephones by the telephone manufacturing companies to DoT, MTNL & BSNL was considered and it was held that the duty will be under Section 4A of the Act and not under Section 4 - it was also held that the cases are similar, and so no reason found to take any other view than what is held in the case of ITEL Industries Pvt. Ltd. vs. CCE. Valuation under section 4A of the Act justified - Appeal dismissed - decided against Revenue. Issues:Valuation of specially packed refrigerators for a specific industry under Central Excise Act, 1944.Analysis:The case involved appeals by the Revenue against orders passed by the Commissioner of Central Excise, Pune-II, and Commissioner of Central Excise (Appeals), Pune-III regarding the valuation of refrigerators manufactured by a company for sale to a specific industry. The company claimed abatement while calculating the assessable value for central excise duty, based on the Maximum Retail Price (MRP). The Revenue contended that the assessable value should be determined under Section 4 of the Central Excise Act, 1944, rather than Section 4A. The dispute centered on whether the refrigerators were specially packed for servicing an industry, affecting their valuation.During the adjudication proceedings, the Commissioner and Addl. Commissioner ruled in favor of the company, emphasizing that there was no requirement of 'retail sale' for valuation under Section 4A or the Standards of Weights and Measures Act. They cited precedents like ITEL Industries Pvt Ltd vs. CCE and other relevant cases to support their decision.The Tribunal, after considering arguments from both sides and examining the records, referred to a significant judgment by the Hon'ble Supreme Court in the case of Jayanti Food Processing Pvt Ltd. vs. CCE. The Supreme Court's decision clarified that goods sold to bottling companies with declared MRPs, similar to the situation in the present case, should be valued under Section 4A of the Act. The Tribunal found that the issue was settled in favor of the assessee based on the Supreme Court's ruling, and dismissed the Revenue's appeals accordingly.In conclusion, the Tribunal upheld the Supreme Court's decision and dismissed the Revenue's appeals, following the established legal principles regarding the valuation of goods sold to specific industries with declared MRPs. The judgment reiterated the application of Section 4A for valuation purposes in such cases, in line with relevant legal precedents and statutory provisions.