2017 (3) TMI 1074 - AT - Central Excise

Tribunal allows appeal, recognizes depot as place of removal for Central Excise Act, upholds refund based on reduced MRP.

M/s M & B Footwear Pvt. Ltd. Versus Commissioner of Central Excise, Noida

M/s M & B Footwear Pvt. Ltd. Versus Commissioner of Central Excise, Noida - 2017 (358) E.L.T. 749 (Tri. - All.) Issues:1. Interpretation of Section 4A of the Central Excise Act, 1944 regarding MRP based valuation.2. Treatment of depot as a place of removal for goods valued under Section 4A.3. Claim of refund based on reduced MRP declared at consignment agents.4. Applicability of abatement on MRP for goods under Section 4A.Analysis:Issue 1: The appeal concerns the interpretation of Section 4A of the Central Excise Act, 1944, which governs MRP based valuation for goods. The appellant, a footwear manufacturer, reduced the MRP of certain goods and claimed a refund based on this reduction. The Original Authority rejected the refund claim, citing that Section 4A does not allow for a lower MRP on clearances to depot/consignment agents. The Commissioner (Appeals) upheld this decision, leading to the appeal before the Tribunal.Issue 2: The key contention revolved around whether a depot can be considered a place of removal for goods valued under Section 4A. The Commissioner (Appeals) held that Section 4A does not provide for treating a depot as a place of removal in such cases. However, the Tribunal disagreed, noting that Section 4A supersedes Section 4 concerning the determination of value for specified goods. Therefore, the finding of the Commissioner (Appeals) was deemed erroneous.Issue 3: The appellant argued that the reduced MRP declared at consignment agents should be considered the valid MRP for refund purposes since the goods remained the property of the manufacturer until sold. The Tribunal considered the standard agreement between the manufacturer and consignment agents, emphasizing that the goods' proprietary rights belonged to the manufacturer until sold. Consequently, the reduced MRP declared during this period was deemed legitimate.Issue 4: Regarding the applicability of abatement on MRP for goods under Section 4A, it was noted that the value determination under Sub-section 2 of Section 4A involves deducting any abatement notified by the Government from the MRP. The Tribunal clarified that the abatement should be considered in line with the provisions of the Notification issued under Section 4A.In conclusion, the Tribunal set aside the Order-in-Appeal and allowed the appeal, providing consequential relief to the appellant as per the law. The judgment clarified the treatment of depot as a place of removal for goods valued under Section 4A and upheld the appellant's right to claim a refund based on the reduced MRP declared at consignment agents during the period when the goods were under the manufacturer's proprietary rights.