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of <h1>Supreme Court clarifies valuation of bulk sales to soft drink maker under Central Excise Act</h1> <h3>Commissioner of Central Excise, Nagpur Versus M/s. Electorlux Kelvinator Ltd.</h3> Commissioner of Central Excise, Nagpur Versus M/s. Electorlux Kelvinator Ltd. - TMI Issues involved: Valuation of refrigerators sold to a soft drink manufacturer in bulk under Section 4 or Section 4A of the Central Excise Act, 1944.Analysis:1. Valuation under Section 4 or Section 4A:The appellant applied Section 4A with Notification No. 9/2000-CE(NT) and discharged excise duty based on MRP minus 40% abatement for refrigerators sold to a soft drink manufacturer in bulk. However, a show cause notice contended that since the refrigerators were not sold at retail but in bulk, valuation should be under Section 4, leading to a demand for differential duty. The adjudicating authority upheld this view, imposing penalties and interest. The Commissioner (Appeals) allowed the appeal based on a CESTAT Larger Bench decision. The Revenue argued that as the refrigerators were not retailed by the soft drink manufacturer, valuation should be under Section 4, citing relevant judgments.2. Precedents and Settlement of Issue:The respondent contended that the issue was settled in the appellant's favor previously by the Supreme Court in a related case. The Supreme Court's judgment in the case of Jayanti Food Processing (P) Ltd. clarified the valuation of refrigerators sold to soft drink manufacturers, emphasizing the difference between MRP and contract price. The Court dismissed the Revenue's appeals, affirming that the duty paid under Section 4A on MRP was correct, aligning with the Tribunal's decision on similar cases involving telephone sales. Consequently, the issue at hand was conclusively settled, and the Revenue's appeal was dismissed based on the settled legal position.In conclusion, the judgment resolved the issue of valuing refrigerators sold in bulk to a soft drink manufacturer under Section 4 or Section 4A, citing relevant legal provisions, precedents, and the final settlement by the Supreme Court. The decision reaffirmed the applicability of Section 4A for such transactions, based on the MRP, and dismissed the Revenue's appeal.
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