TaxTMI 
TaxTMI 
2009 (8) TMI 489
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....n 4A of the Act, if any goods are specified by the Central Government by a notification in the Official Gazette issued under the said section and in relation to which it is required under the provisions of the Standards of Weights and Measures Act, 1976 or the Rules made thereunder any other law for the time being in force, to declare on the package thereof, the retail sale price of such goods, then the assessable value of the said goods shall be determined based on the MRP affixed on the package less such amount of abatement from such retail sale price, as may be notified. The said goods are specified under S.No. 60 of the table annexed to Notification No. 13/2002-C.E. (N.T.), dated 1-3-2002 and S. No. 64 of the table annexed to Notification No. 2/2006-C.E. (N.T.), dated 1-3-2006. During the course of scrutiny of ER 1 returns, it was observed that the appellant, apart from clearing the said goods under Section 4A, have also cleared the goods by adopting value under Rule 8 of Valuation Rules, 2000, as mentioned below: (i) Adopted Section 4A value under MRP in respect of clearances of packed Razors and Razor blades made to their depots located across the country. (ii) Adopt....
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....C of the Central Excise Act, 1944; (d) Interest at applicable rates from time to time on the duty demanded at - Sl. No. (b) above should not be demanded from them under Section 11AB of the Central Excise Act, 1944; (e) Penalty under Rule 25 of the Central Excise Rules, 2002 should not be imposed on them for violation of the provisions of the Central Excise Act, 1944 and the Rules made thereunder as discussed above. II.(a) Duty on the Safety Razor blades and Razors cleared in bulk during the period February 2007 to January 2008 should not be assessed under Section 4A of the Central Excise Act, 1944 read with the provisions of SWMA. (b) The duty of Rs. 2,36,78,196/- (Two Crores thirty six lakhs Seventy eight thousand one hundred and ninety six only)(including education cess and secondary higher education cess) which was short paid on the goods cleared during the period February 2007 to January 2008 should not be demanded from them under Section 11A of the Central Excise Act, 1944. (c) Penalty equal to the duty mentioned at Sl. No. (b) above should not be imposed on them under Section 11AC of the Central Excise Act, 1944. (d) Interest at applicable rates from time to....
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....ions made in adopting a manipulative price under section 4 of the Central Excise Act to evade payment of duty. (e) I order that interest in accordance with the provisions of Section 11AB shall also be payable on the amount of demand confirmed above in clause (a) and (c). Hence this appeal. 3. Ld. Counsel appearing on behalf of the appellant would submit as under:- A. Issue fully settled by the decision of the Supreme Court in case of Jayanthi Food Processing (P) Ltd. A1. Section 4A of the Central Excise Act, 1944, which provides for the valuation of excisable goods with reference to the retail sale price in respect of the goods specified under sub-section (1) of Section 4A. A2. The term, "retail sale price" as appearing in the aforesaid provisions, is statutorily defined by way of Explanation 1 under Section 4A which reads as under: Explanation 1 - For the purpose of this section, 'retail sale price' means the maximum price at which the excisable goods in packaged form may be sold to the ultimate consumer and includes all taxes, local or otherwise, freight, transport charges, commission payable to dealers, and all charges towards advertisement, delivery, packin....
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....ct. (a) CCE, Hyderabad v. Sridhar Paints Co. P. Ltd. - 2008 (224) E.L.T. 455 (Tri.-Bang.) (b) Campco Chocolate Factory v. CCE & Vice-versa - 2008 (87) RLT 144 (c) Zodiac Clothing Co. Ltd. v. CCE - 2009 (235) E.L.T. 723 (Tri.-Bang.) (d) Crystal Paints v. CCE - 2009 (235) E.L.T. 371 (Tri.-Mum.) A10. The Commissioner has wholly erred in relying upon the decision of CESTAT in the case of Itel Industries Pvt. Ltd [2004 (163) E.L.T. 219]. In that case the department argued that the provisions of Section 4A will not be applicable since the packages in question were exempt from the requirement of declaration of MRP. In that context the CESTAT observed that the exemption from declaration of MRP would be available only if the packages satisfy the requirement of Rule 34 of Packaged Commodities Rules. In that case it was not argued that the packages were not intended for retail sale. In fact the contention in that case was that packages were intended for retail sale and therefore the provisions of Section 4A would be applicable. A11. In the present case it is an undisputed fact that the condition in which the razor and razor blades in question were cleared, these were not int....
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.... in question have been cleared in bulk to the factories in Himachal Pradesh. Further, the goods in question have been cleared for industrial use, i.e. the activity of assembling and/or packing at the factories in Himachal Pradesh. This process amounts to manufacture in terms of section 2(f)(iii) of the Act. Thus, the goods in question have undisputedly been cleared for industrial use. Since, both the requirements given in the first instance in the above circular had been satisfied, the valuation of the goods in terms of the above clarification issued by the Board will only be under Section 4 and not Section 4A of the Act. C. The value determined under Section 4A for the goods packed in retail pack cannot be the basis for determining the value of the goods cleared in bulk. C.1. The Show Cause Notice has adopted the M.R.P of the goods when sold in packaged form as the basis for determining the differential duty liability. C.2. It is submitted that the re-determination of the MRP can be done only in terms of Section 4A(4) of the Central Excise Act, 1944. Section 4A(4) of the Act provides that where a manufacturer does not declare the MRP for the specified goods, that the auth....
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....chal Pradesh for the goods after they are cleared in bulk at Hyderabad has no relevance to the determination of assessable value of the goods cleared in bulk. Hence, the allegation of non declaration of nature of packing done at the factories in Himachal Pradesh to which the goods were cleared in bulk, cannot be a ground to invoke the extended period of limitation under Section 11A of the Central Excise Act, 1944. Hence, the extended period of limitation during the period from April 2005 to December 2005 is barred by limitation under Section 11A of the Central Excise Act, 1944. D.4. The entire show cause proceeds on the basis of scrutiny of ER-I Return only which has been periodically required to be filed by the appellants, in terms of the Central Excise Rules. When the demand is being raised based on statutory documents filed with the department periodically there cannot be any allegation of suppression of facts. For this reason as well the extended period of limitation is not applicable. D.5. Further the department itself vide letter dated 19-9-2006 had indicated that the valuation of the goods should be done as per Rule 8 only. There was never a suggestion that the goods i....
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....5) E.L.T. (371) (Tri.-Mum.)] and Millennium Appliances India Ltd. v. CCE - Final Order No. 322 to 325/2009, dated 18-3-2009 [2009 (248) E.L.T. 713 (Tribunal)], for the proposition that the judgments/decision of the Hon'ble Supreme Court in the case of Jayanti Food Processing (P) Ltd. will be squarely applicable. 5. Ld. Jt. CDR on the other hand would reiterate the findings of the adjudicating authority. It is her submission that the claim of the appellant that they had cleared the "Razors and Razor Blades" in bulk is incorrect inasmuch as Razors were completely manufactured and when the goods were cleared from the factory premises of the appellant, they were sent along with packing material required for packing these goods, to Himachal Pradesh. It is her submission that the said packing material had all the particulars regarding the retail sale price and all the requirements of the labelling provisions of Standards of Weights and Measurement Act and Rules made thereunder. It is her submission that the appellant had tried to evade the duty by discharging the duty liability under Section 4 of the Central Excise Act, 1944. It is her submission that the entire exercise was done in o....
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....e products notified under Section 4A. We may reproduce the relevant ratio paragraphs for the purpose of deciding this case before us. "2. All these appeals pertain to the interpretation of Section 4 and 4A of the Central Excise Act, 1944 (hereinafter referred to as "the Act") and the provisions of Standards of Weights & Measures Act, 1976 (hereinafter referred to as "the SWM Act") as also the Standards of Weights & Measures (Packaged Commodities) Rules, 1977 (hereinafter referred to as "the SWM (PC) Rules"). In the appeals filed by the assessees, Jayanti Foods and Nestle India the Tribunal has accepted the contention of the Department that these assessees should be assessed under Section 4A while the contention of the assessees is that they should be assessed and taxed under Section 4 of the Act. In the appeals filed by the Department pertaining to sale of Telephone Instruments, the contention of the Department is that they should also be taxed and assessed under Section 4 and not under Section 4A of the Act as ordered by the Tribunal. Similar is the case in respect of appeals pertaining to the sale of Refrigerators where the Tribunal has ordered the assessment under Section 4A ....
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....ther taxes, if any, payable on such goods. (4) If any manufacturer removes from the place of manufacture any excisable goods specified under subsection (1) without declaring the retail sale price of such goods on the packages, or declares a retail sale price which does not constitute the sole consideration for such sale, or tampers with, obliterates or alters any such declaration made on the packages after removal, such goods shall be liable to confiscation. Explanation 1. For the purposes of this section, "retail sale price" means the maximum price at which the excisable goods in packaged form may be sold to the ultimate consumer and includes all taxes local or otherwise, freight, transport charges, commission payable to dealers, and all charges towards advertisement, delivery, packing, forwarding and the like, as the case may be, and the price is the sole consideration for such sale. Explanation 2(a). Where on the package of any excisable goods more than one retail sale price is declared, the maximum of such retail sale price shall be deemed to be the retail sale price for the purpose of this section. (b) Where different retail sale prices are declared on different pa....
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....nd are packaged and further such packages are required to mention the price thereof under the SWM Act, Rules made there under or under any other law and further such goods are specified by the Central Government by notification in the Official Gazette, then the valuation of such goods would be on the basis of the retail sale price of such goods and only to such goods the provisions of sub-section (2) shall apply whereby it is provided that the value of such goods would be deemed to be the such retail price declared on the packages. Of course, the assessee shall be entitled to have a reduction of abatement as declared by the Central Government by the notification in the Official Gazette. Even at the cost of repetition the following would be factors to include the goods in Section 4A(1) & (2) of the Act: (i) The goods should be excisable goods; (ii) They should be such as are sold in the package; (iii) There should be requirement in the SWM Act or the Rules made there under or any other law to declare the price of such goods relating to their retail price on the package; (iv) The Central Government must have specified such goods by notification in the Official Gazette; ....
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....d Counsel further argues that such "package" was for the purposes of "servicing the hotel industry or catering industry" as the case may be. Learned Counsel is undoubtedly right when he seeks to rely on Rule 34 which provides for exemption of the "packages" which are specially packed for the exclusive use of any industry for the purposes of "servicing that industry". Shri Subba Rao supported the view expressed by the Tribunal that the words "servicing any industry" could not cover the present case and he further suggested that ice-cream cannot be a "raw material" for any industry. He is undoubtedly right that the ice-cream cannot be termed as "raw material" for any industry. However, the words "or for the purposes of servicing any industry" are broad enough to include the transaction in question, i.e., the sale of a pack of ice-cream to the retail industry. Hotel does not manufacture the icecream and is depended entirely upon the sale of icecream to it by the assessee for ultimately catering the commodity in the package, i.e. ice-cream to the ultimate consumer. In our view this can be squarely covered in the term "servicing any industry". The word "service" is a noun of the verb "t....