TaxTMI 
TaxTMI 
2003 (11) TMI 374
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.... M/s. Pepsico India Holdings Ltd. was meant for free supply of the same along with one bottle of Pepsi of 1.5 litres as a sales promotion scheme. The appellant cleared the disputed goods after payment of duty at Rs. 4.80 per Kitkat in terms of Section 4, after filing due declarations. However, the Department entertained a view that the appellant was required to declare the retail sale price of the Kitkat in question under the provisions of Standards of Weights and Measures Act, 1976 and since the said product is specified under the provisions of Section 4A, they were required to pay the duty on the said product on the basis of the MRP declared on the packages and not on the basis of the contract price in terms of Section 4. 3. On the above basis the appellants were served with a show cause notice dated 14-8-2001 raising demand of duty of Rs. 48,95,370/- along with proposal to impose penalty upon the appellant and confirmation of interest. The appellant contested the proposal to determine the assessable value in terms of Section 4A and contended that since there was no statutory requirement to declare maximum retail price (hereinafter referred to as MRP) under the provisions o....
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....d in the market with printed MRP would be assessed under Section 4A of the Act. It was also clarified in the said circular that the bulk sale of ice-cream to hotels/restaurants which are not meant for retail sales as such, are not covered by the provisions of the Weights and Measures Act and consequently by the provisions of Section 4A of Central Excise Act. On the above basis the ld. Adv. has prayed for setting aside the impugned order. 6. Countering the arguments Shri Hitesh Shah, ld. SDR has reiterated the reasoning adopted by the adjudicating authority and has drawn our attention to his findings. It has been specifically emphasised that Section 4A applies to those goods which are required to be printed with the maximum retail price under the Weights & Measures (Packaged Commodity) Act and inasmuch as the appellants' product is one of the products required to be printed with MRP, the same would be covered by the provisions of Section 4A. Ld. SDR has further contended that there is no exception under the said section for excluding the item meant for free supply. He has further drawn our attention to the Rule 34 of the Standards of Weights and Measures (Packaged Commodity) ....
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....facture any excisable goods specified under sub-section (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 purposes of this section. (b) Where different retail sale prices are declared on different packages for the sale of any excisable goods in packaged form in different areas, each such retail sa....
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....Admittedly the situation in the present case is not covered by any of the conditions noticed in the said Rule 34, which means that the appellants are not exempted from marking the package with the maximum retail price. Accordingly there is a legal requirement on the part of the assessee to print the MRP on the package of 'Kitkat' irrespective of the fact whether the same is meant for sale in retail or is required to be supplied under a contract to the other consumer. 9. We also note from the Explanation 1 to Section 4A of Central Excise Act, 1944 that the retail sale price is maximum price at which the excisable goods in packaged form may be sold to the ultimate consumer. The expression used is may be and not shall be. From this we conclude that even if a portion of the goods is sold at a lower rate than the MRP affixed thereon, the assessable value in respect of such percentage of goods will not be lowered on the ground that they have actually been sold at a lower rate. The appellants have strongly contended that the goods were not being sold by M/s. Pepsico in retail market, but were being supplied free of cost. This argument does not help the appellant. Taking a situation ....
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.... not the individual packages which are required to be considered depending upon their mode of distribution, for the purposes of the provisions of Section 4A. As such the ld. Adv.'s argument that since some of the packages are meant for free distribution, the same would qualify for their assessment under Section 4 in spite of the fact that identical packages of the same goods, when sold in retail earn assessment under Section 4A, is not acceptable. 12. Ld. Adv. has also drawn our attention to the definitions of retail package, retail sale and retail sale price as appearing in Rule 2(p), Rule 2(q) and Rule 2(r) of Standards of Weights & Measures (Packaged Commodities) Rules, 1977. We reproduce the said rules for ready reference :- "(p) "retail package" means a package containing any commodity which is produced, distributed, displayed, delivered or stored for sale through retail sales agencies or other instrumentalities for consumption by an individual or a group of individuals; (q) "retail sale", in relation to a commodity, means the sale, distribution or delivery of such commodity through retail sales agencies or other instrumentalities for consumption by an indivi....