Excise duty upheld on cement sold at concessional rates; penalty canceled. The Tribunal upheld the demand of excise duty based on Maximum Retail Price (MRP) for cement sold at concessional rates to workers, despite the reduced ...
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Excise duty upheld on cement sold at concessional rates; penalty canceled.
The Tribunal upheld the demand of excise duty based on Maximum Retail Price (MRP) for cement sold at concessional rates to workers, despite the reduced price. The duty was required to be paid on the MRP printed on packages, with applicable abatements, as per Section 4A of the Central Excise Act. The penalty was canceled as duty was paid suo moto before the show cause notice, following the precedent set by a Gujarat High Court case. The appellant's appeal was partially allowed, sustaining the duty demand but canceling the penalty.
Issues: 1. Calculation of excise duty based on Maximum Retail Price (MRP) for cement sold at concessional rates to workers. 2. Applicability of penalty when duty is paid suo moto before issuance of show cause notice.
Analysis: 1. The appellant, engaged in cement manufacturing, sold cement to its workers at a concessional rate of Rs. 100 per bag of 50 kgs, while the printed MRP was Rs. 189 per bag. The duty was discharged at Rs. 350 per metric ton. The department demanded duty at Rs. 600 per metric ton based on MRP, leading to the appeal against Order-in-Appeal No. 358/2010 dated 31.8.2010.
2. The Tribunal observed that duty is required to be paid on the MRP printed on packages after permissible abatements, as it represents the maximum price chargeable to the ultimate customer. Despite the reduced price for workers, duty is payable based on MRP as per Section 4A of the Central Excise Act. The Tribunal agreed with the lower authorities that the reduced price cannot be printed on packages, upholding the demand of duty based on MRP with applicable abatements. The impugned order was sustained, directing the computation of duty difference with interest from the appellant.
3. Regarding penalty, the Tribunal referenced the Gujarat High Court case of CCE vs. Tripura Containers, establishing that when duty is paid suo moto before the issuance of a show cause notice, penalty is not leviable. Consequently, the penalty was canceled even though the duty demand was sustained. The appeal filed by the appellant was partially allowed, maintaining the duty demand but canceling the penalty.
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