Assessment of Free Razors under Central Excise Act The Tribunal held that razors supplied for free distribution with another product should be assessed under Section 4 of the Central Excise Act, not ...
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Assessment of Free Razors under Central Excise Act
The Tribunal held that razors supplied for free distribution with another product should be assessed under Section 4 of the Central Excise Act, not Section 4A. The Tribunal found that since the razors did not have a printed maximum retail price (MRP) and were marked as free with the shoe polish, they were not intended for retail sale. Therefore, the appeal was allowed, setting aside the order-in-appeal by the Commissioner (Appeals).
Issues Involved: The issue involved in this case is whether the razors supplied along with another product for free distribution are to be assessed under Section 4A or Section 4 of the Central Excise Act.
Summary: The appellants, engaged in manufacturing twin blade razors on a job work basis, appealed against an order-in-appeal passed by the Commissioner (Appeals). The dispute revolved around the assessment of razors supplied to M/s. Reckitt Benckiser India Limited along with cherry blossom shoe polish. The main contention was whether the razors should be assessed under Section 4 or Section 4A of the Central Excise Act.
The appellant argued that since the razors were not for retail sale and were specifically marked as free with cherry blossom, they should be assessed under Section 4 of the Act. On the other hand, the revenue contended that since the razors were ultimately supplied for retail sale along with the shoe polish, they should be assessed under Section 4A.
The Tribunal considered a circular issued by the Board which clarified that Section 4A applies to goods where the manufacturer is legally obliged to print the MRP on the packages. Since the razors in question did not have an MRP mentioned and were marked as free with the shoe polish, the Tribunal found merit in the appellant's argument that the razors should be assessed under Section 4 of the Act.
The Tribunal distinguished the present case from previous decisions cited by the revenue, where goods with an MRP declaration were given free with other products. As the razors in this case did not bear an MRP declaration, the impugned order was set aside, and the appeal was allowed.
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