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of <h1>Supreme Court remits valuation dispute back to Tribunal for fresh consideration.</h1> <h3>PROCTOR & GAMBLE HYGIENE & HEALTH CARE LTD. Versus CCE., BHOPAL</h3> PROCTOR & GAMBLE HYGIENE & HEALTH CARE LTD. Versus CCE., BHOPAL - 2005 (190) E.L.T. 289 (SC) Issues Involved:1. Whether the cost of repacking detergent powder into sachets was includible in the assessable value of bulk packs.2. Whether there was suppression of facts by the assessees justifying the invocation of the extended period of limitation.3. Whether the valuation of the bulk packs should be based on the retail price of the sachets.Issue-Wise Detailed Analysis:1. Cost of Repacking and Assessable Value:The primary issue was whether the cost of repacking detergent powder into 20 gms. and 30 gms. sachets should be included in the assessable value of 'ariel micro-system' (AMS) cleared in bulk packs of 25 kgs. at the factory gate. The appellants contended that repacking did not amount to manufacture under the Central Excise Act, 1944, until the introduction of Chapter Note 6 in Chapter 34 via the Finance Bill, 1994. They argued that since repacking was not considered manufacture at the relevant time, the cost of repacking should not be included in the assessable value of the bulk packs.2. Suppression of Facts and Extended Period of Limitation:The department issued a show cause notice alleging that the appellants had suppressed the true price of AMS by not disclosing the agreement with IED for repacking and by declaring only the cost of 25 kgs. bulk packs for payment of excise duty. The appellants countered that there was no suppression as they had informed the department about the repacking arrangement and that repacking did not amount to manufacture before the 1994 amendment. The Tribunal, however, upheld the department's view, stating that the appellants had deliberately suppressed the details of repacking, justifying the invocation of the extended period of limitation under the proviso to Section 11A(1) of the Act.3. Valuation Based on Retail Price:The Tribunal and the Commissioner of Central Excise held that the valuation of the 25 kgs. bulk packs should be based on the retail price of the sachets sold through the appellants' depots. The appellants argued that the bulk packs were cleared for captive consumption and not for sale, and hence, the valuation should be based on the cost method under Rule 6(b) of the Valuation Rules, 1975. They contended that the retail price of the sachets should not be used for valuation as repacking did not constitute manufacture at the relevant time.Tribunal's Oversight:The Supreme Court noted that the Tribunal had not addressed the key issue of determining the assessable value of the 25 kgs. bulk packs. The Tribunal failed to consider whether the Commissioner was justified in using the retail price of the sachets for valuation, especially when repacking did not amount to manufacture at the relevant time. Additionally, the Tribunal did not examine the appellants' argument regarding suppression and the invocation of the extended period of limitation in light of the 1994 amendment.Conclusion and Remand:The Supreme Court allowed the appeal, set aside the Tribunal's judgment, and remitted the matter back to the Tribunal for fresh consideration. The Tribunal was directed to decide on the assessable value of the bulk packs and the issue of suppression, taking into account the principles discussed by the Court, particularly in the context of Section 4(4)(d)(i) of the Central Excise Act, 1944. There was no order as to costs.
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