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2013 (10) TMI 884
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....ducts. These goods are classified under Chapter Heading 8536 of the First Schedule to the Central Excise Tariff Act, 1985. The appellants are selling their products to their dealers/distributors from the factory or from their depots. The appellants have not affixed MRP on their products since inception as per the Standard of Weights (Packaged Commodities) Rules, 1977. Rule 6(1)(f) read with Rule 2 (r) of the PC Rules required affixation of retail sale price. Prior to 1990, as the goods are classified under Chapter Heading 8536 of the First Schedule to the Central Excise Act, 1985 were notified for MRP based assessment w.e.f. 1.3.2002 vide Notification No. 13/2002-CE(NT) and thereafter, under Notification No. 2/2006-CE(NT) as per these Notifications the assessee is entitled an abatement of 40% from MRP to arrive the assessable value. The contention of the appellant is that their products were not covered by P.C. Rule relating to MRP Rules, the product did not classified as pre-packed commodity and were not sold by weight, measure or number. The appellants were also making the following declaration on the packing 'Specially packed for the exclusive use of any industry as a raw materi....
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.... their vendors factory in their brand name. In some products which are meant for retail sale, the appellants are affixing MRP and discharged duty liability of Central Excise Duty as per Section 4A of the Act. The dispute in the present case is that as goods are falling under Chapter Heading 8536 of the Central Excise Tariff Act, 1985 are notified goods. Therefore, the appellants are required to affix MRP on their products as per the Rule 2(1) of the Standard Weights and Measures (Packaged Commodity) Rules, 1977 as amended as on the premise that the declaration of retail price was not necessary in respect of these products which were not intended to be sold in retail and were meant for industrial obligation and declaration was made to this effect as they were used manufacturer of control panel. The show cause notices were issued to the appellant and the vendors on the premise that as the appellant are not discharging their duty liability as per Section 4A of the Act. Therefore, demand for differential duty was confirmed against the appellant. M/s. Siemens Ltd. :- The appellants are manufacturer of different lines of electric switch gear one type of switch gears are sold for indus....
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....he decision of Jayanti Food Processing Pvt. Ltd. Vs. CCE reported in 2007 (215) ELT 327, and Titan Industries Ltd. Vs. Commissioner of Customs, Chennai, reported in 2007 (216) ELT 327. 4. It is further contended that electric switchgears were meant for industrial use are not commodities in packed form and therefore impugned products are not covered by Rule 1(3) of the Standard of Weights and Measures (Packaged Commodities) Rules, 1977 for this reliance was placed on the following decisions. (i) Philips India Limited V. Union of India 2002 WLR 140; (ii) Eureka Forbes Ltd. V. Union of India, AIR 2003 AP 275; (iii) Titan Industries Ltd. V. Union of India, AIR 2006 Bom 336, (iv) Subhash Arjandas Kataria V. State of Maharashtra, AIR 2006 Bom 393; (v) Pieco Electronics & Electricals Ltd. V. Union of India and Ors., vide order of the Hon'ble High Court of Kerala dated 26/08/2002 in O.P. No. 14701/1994; (vi) Pieco Electronics & Electricals Ltd. V. Union of India and Ors., vide order of the Hon'ble High Court of Andhra Pradesh dated 05/09/2002 in W.P. No. 11966/1991; (vii) Cont....
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....irlpool of India Ltd. Vs. Union of India reported in 2007 (218) ELT 167 (S.C.). The said decision is also jeopardy as the Hon'ble Apex Court in the case of Subhash Arjundas Kataraia reported in 2012 (278) ELT 289 (S.C.) has doubted the said decision and referred the matter to Larger Bench of the Apex Court. Therefore the decision of Larsen & Toubro Ltd. of the Hon'ble High Court is not a good law. 8. All the Counsels for the appellants submits that on the following grounds the demand are not sustainable. Therefore impugned orders are to be set aside. 9. In alternate it is submitted that the demands for extended period of limitation, (in the case of Schneider Electric Pvt. Ltd.), the adjudicating authority has already dropped and the appellants were under the bona fide belief that the products are meant for industrial use and not required to affix MRP and same were cleared on payment of duty under Section 4 of the Act, therefore, the demands for extended period of limitation in the case of Larson & Toubro Ltd. and its vendors and Siemens are not sustainable. 10. On the other hand the contentions of the appellants were strongly opposed by the Ld. AR appearing on behalf of th....
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....ng a reasonable provisions to make the law operational. Therefore irrespective of the fact that Rules in terms of sub-section 4(4) came to be issued on 01.03.2008, the provisions of this subsection had to be given effect to by adopting any reasonable means that could help to ascertain the retail sale price of the impugned goods, and in case of any goods which are sold at different prices, the maximum of any of its retail sale price is liable to be adopted as the retail sale price in terms of Section 4A(4)(a) Explanation-1 to read with Explanation-2 sub clause (a). Therefore, the spirit of the law can be cured out from such provisions that the maximum of any retail sale price has to be ascertained and adopted for the purpose of levy of duty. Therefore, the Revenue is free to adopt any reasonable means to ascertain the maximum retail price by means of market enquiries or otherwise. The MRP ascertained by the Revenue has been adopted for demand of MRP in terms of Section 4A. In such circumstances, it cannot be the appellant's case that such MRP were merely notional. Such a price cannot be deemed to be beyond the realm of reasonableness as has been the spirit of the decision of the of ....
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....retail sale price of the impugned goods, more so for the past transactions. It is submitted that the market enquiries as broad connotations, which may include ascertaining any market related data/information that can be legitimately obtained to determine the maximum retail price of inputs. That the price lists adopted by them in their marketing chain continues to guide the stockists as well as the retailers as to the maximum retail sale price, shall make a valid basis to ascertain and determine the MRP for the purpose of Section 4A, ibid. Thus, the MRP, excluding the local taxes & octroi, ascertained by the original authority, duly supported by the appellant's own documentation corroborated by stockists evidences is most reasonable and valid basis against which no valid submission could be made by the appellants. 12. On limitation it is submitted that the appellants have attempted to take cover of an alibi in the forms of other case laws on the different products, including one pertaining to similar switchgears. There is a need to appreciate that the appellants herein were well aware that there products invited the provisions of Section 4A, ibid especially owing to themselves ad....
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....e of Subhash Arjundas Kataria (supra) has doubted the same. 17. We are not convinced with the arguments advanced by the Ld. Counsel for the appellant. In the light of decision of this Tribunal in the case of M/s. Access Textiles & another vide Order No. A/569-572/13/CSTB/C-I dt. 23.4.2013 this Tribunal has observed as under:- "It is seen that the judgement in the case of West Coast (Supra) is not a precedent for the ratio that a judgement losses its precedent value if stayed by a superior Court, the said judgement was on the issue of Commencement of the period of limitation for filing suit, whether from the date of passing of original decree or from the date of passing of appellate decree by a Superior Court. While deciding this question, while holding the period from which writ petition was pending before the Superior Court was excludable for computing period of limitation, in that context, it was observed by the Hon'ble Apex Court that on admission of appeal correctness or otherwise of judgement impugned becomes wide open and is in jeopardy. In the case of B.S. Refrigerators Ltd. (Supra), neither the judgement of the Hon'ble Apex Court in the case of Shri Chamu....
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.... the appellants on the provisions of Section 4A of the Central Excise Act (as is reproduced in Para 8 hereinabove). We find that the Department did not issue any guidelines or rules for determination of value as provided under sub-section (4) of Section 4A of the Central Excise Act. We find that Notification No. 13/2008-C.E. (N.T.), dated 1-3-2008 incorporates Central Excise (Determination of Retail Sale Price of Excisable Goods) Rules, 2008 which reads as under :- "Central Excise (Determination of Retail Sale Price of Excisable Goods) Rules, 2008. [Notification No. 13/2008-C.E. (N.T.), dated 1-3-2008] In exercise of the powers conferred by Section 37 read with sub section (4) of Section 4A of the Central Excise Act, 1944 (1 of 1944), the Central Government hereby makes the following rules, namely :- RULE 1 . (1) These rules may be called the Central Excise (Determination of Retail Sale Price of Excisable Goods) Rules, 2008. (2) They shall come into force on the date of their publication in the official Gazette. RULE 2 . In these rules, unless the context otherwise requires. (a) 'Act' me....
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....e package of goods after their removal from the place of manufacture, resulting into increase in the retail sale price, then such increased retail sale price shall be taken as the retail sale price of all goods removed during a period of one month before and after the date of removal of such goods: Provided that where the manufacturer alters or tampers the declared retail sale price resulting into more than one retail sale price available on such goods, then, the highest of such retail sale price shall be taken as the retail sale price of all such goods. RULE 6 . If the retail sale price of any excisable goods cannot be ascertained under these rules, the retail sale price shall be ascertained in accordance with the principles and the provisions of section 4A of the Act and the rules aforesaid." It can be noted that these rules came into force with effect from 1-3-2008. We are of the considered opinion that if these rules came to be effective on 1-3-2008, the ascertaining of value of similar goods has to be done so, with effect from 1-3-2008 and cannot be used to determine the value for the clearances made prior to 1-3-2008. We find st....
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....such goods; or by declaring the retail sale price, which is not the retail (b) sale price as required to be declared under the provisions of the Standards of Weights and Measures Act, 1976 (60 of 1976) or rules made thereunder or any other law for the time being in force; or by declaring the retail sale price but obliterates the same (c)after their removal from the place of manufacture, then, the retail sale price of such goods shall be ascertained in the following manner, namely:- if the manufacturer has manufactured and removed identical (i) goods, within a period of one month, before or after removal of such goods, by declaring the retail sale price, then, the said declared retail sale price shall be taken as the retail sale price of such goods: if the retail sale price cannot be ascertained in terms of (ii) clause (i), the retail sale price of such goods shall be ascertained by conducting the enquiries in the retail market where such goods have normally been sold at or about the same time of the removal of such goods from the place of manufacture: Provided that if more than one retai....
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....not declare the RSP on the packages imported. The assessee had relied on the judgment of Hon'ble High Court of Madras in Eternit Everest Ltd. Vs. Union of India [1997 (89) ELT 28] wherein their lordships had quashed the demand notices issued under 11D of the Act proposing to recover amounts collected as excise duty in excess of what was due and paid to the exchequer on the ground that there was no machinery provision in the statute to recover the same. We find that the situation obtaining in the case on hand is similar to the situation covered by the above judgment. The Section 11D of the Act had provided that "every person who has collected any amount from the buyer of any goods in any manner as representing duty of excise shall forthwith pay the amount as collected to the credit of the Central Government". Further in the case of Ravi Food Pvt. Ltd. (supra) this Tribunal further observed that: "It can be seen from the above reproduced Section 4A of the Central Excise Act, 1944, that the said section provides for determination of duty payable on excisable goods on the basis of RSP as per the provisions of Standards of Weights and Measures Act, 1976 and Rules made....
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....e hold that demands for the period prior to 1.3.2008 are not sustainable as there is no machinery provisions to determine the MRP of the product in the absence of MRP is not affixed on the product. Issue No. C: Whether the list price can be adopted as MRP or not? The list price is the basis of MRP as held by the Ld. Commissioner in the impugned order. 18. As per the Central Excise (Determination of Retail Sale Price of Excisable Goods) Rules, 2008. Rule 4 deals with the situation which is reproduced as under: Rule 4. Where a manufacturer removes the excisable goods specified under sub-section (1) of section 4A of the Act,- (a) without declaring the retail sale price on the packages of such goods; or (b) by declaring the retail sale price, which is not the retail sale price as required to be declared under the provisions of the Standards of Weights and Measures Act, 1976 (60 of 1976) or rules made thereunder or any other law for the time being in force ; or (c) by declaring the retail sale price but obliterates the same after their removal from the place of manufacture, then, the retail sale price of such goods sh....
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....dheri (E) Mumbai to M/s. Shanti Switchgear, Airoli, Navi Mumbai. The Revenue has not produced any invoice issued by M/s. Shanti Switchgear to establish that at which price M/s. Shanti Switchgear has sold the goods or otherwise. It is not ascertained by the Revenue that M/s. Shanti Switchgear has utilized these goods for their own consumption or otherwise. The similar invoice issued in the name of Power Flow Electricals Goregaon (E), Mumbai, in that case also no efforts were made to ascertain M/s. Power Flow Electricals as sold the goods in retail if so, what is the retail price. The provisions of Rule 4(a)(ii) clearly cast the liability on the department to conduct enquiries in the retail market and same has not been done. The provisions of law are to be followed strictly. We further see that list price has not been made the basis for MRP. In fact on list price the manufacturers have added VAT & Octroi and thereafter ascertain the price on which they are giving discount to their dealers and these dealers further passed on the discount to the buyers. In that situation, unless and until it is ascertained at which price the final goods were sold in the retail market the retail sale pr....
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....ce to retail sale price. (1) The Central Government may, by notification in the Official Gazette, specify any goods, in relation to which it is required, under the provisions of the Standards of Weights and Measures Act, 1976 (60 of 1976) or the rules made thereunder or under any other law for the time being in force, to declare on the package thereof the retail sale price of such goods, to which the provisions of sub-section (2) shall apply. (2) Where the goods specified under sub-section (1) are excisable goods and are chargeable to duty of excise with reference to value, then, notwithstanding anything contained in section 4, such value shall be deemed to be the retail sale price declared on such goods less such amount of abatement, if any, from such retail sale price as the Central Government may allow by notification in the Official Gazette. (3) The Central Government may, for the purpose of allowing any abatement under sub-section (2), take into account the amount of duty of excise, sales tax and other taxes, if any, payable on such goods. Explanation 1 . - For the purposes of this section, "retail sale price" mea....
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.... situations elaborated in sub-section (4), in such cases assessing officer would assess duty liability after arriving at M.R.P. based upon various materials available to him as also provisions of Section 4A. In brief, assessing officer would use best judgment to arrive at MRP based upon the material available and thereafter assess the duty liability. The assessing officer is not allowed to assess the goods covered by Section 4A in terms of Section 4, as such an action would be against specific prohibition imposed under Section 4A (2). 23.5 In 2003, sub-section (4) was again amended and new sub-section (4) read as under;- "(4) Where any goods specified under sub-section (1) are excisable goods and the manufacturer - (a) removes such goods from the place of manufacture, without declaring the retail sale price of such goods on the packages or declares a retail sale price which is not the retail sale price as required to be declared under the provisions of the Act, rules or other law as referred to in sub-section (1); or (b) tampers with, obliterates or alters the retail sale price declar....
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....il sale price or in other situation as elaborated, the retail sale price shall be ascertained in the prescribed manner. The amendment in 2003, stipulated that Government will prescribe the method for ascertainment of MRP in specified situation which was hitherto being done based upon best judgement method by assessing officer. Even though the said amendment was made in May 2003, the manner for ascertainment was prescribed only on 1st March, 2008 vide Notification No. 13/2008-CE(N.T.), dated 1.3.2008. Here again the administering machinery to ascertain retail price in the prescribed manner was neither defined nor required to be defined, as the function was already assigned to assessing officer. All that was done by the Notification was to provide guidance to the assessing officer in certain situations in which so far assessing officer was assessing the duty using his best judgement consistent with provisions of Section 4A. 23.6 The issue that arises is that during the period from 14 th May2003 to 1 st March 2008, if a manufacturer cleared goods (specified under Section 4A(1) and chargeable to duty based upon MRP) without declaring MRP or in situations elaborated in Section 4A(4),....
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.... admissible in any statute, what is called an equitable construction, certainly, such a construction is not admissible in a taxing statute where you can simply adhere to the words of the statute. Viscount Simon quoted with approval a passage from Rowlatt, J. expressing the principle in the following words: In a taxing Act one has to look merely at what is clearly said. There is no room for any intendment. There is no equity about a tax. There is no presumption as to tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used. (at p. 635)" 24. The 1956 Act contains the charging provision. Upon amendment of the definition of 'sale' in the year 2002, the transfer of property in goods involved in the execution of works contract would be treated to be a sale. It may be true that further amendments had been made in the year 2005 and for certain purposes, the subsequent legislations may also be considered for the construction of a statute, but in our opinion, it is not necessary to do so. 25. A taxing statute indisputably is to be strictly construed. [See J. Srinivasa Rao v. Govt. of Andhra Pradesh & Another - 2006....
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....acturing and selling certain consumer electronic items in combination under a scheme called "Combination Scheme". The price under "Combine MRP" when examined was found to be lesser than the aggregate of MRPs of individual consumer goods when cleared separately. Revenue wanted to charge duty on the basis of the aggregate of MRPs of individual; which was not accepted by the Tribunal. While arguing the said case, Appellant also contended that during the period Central Excise (Determination of Retail Sale Price of Excisable Goods) Rules, 2008 were not in existence and Tribunal commented on that. Similarly, in case Ravi Foods Pvt. Ltd. reported in 2011 (266) E.L.T. 399 (Tri-Bang.), demand was raised based upon disclosure of undisclosed income made before the Income Tax authorities. Ravi Food happens to be manufacturing MRP based commodity. In that context, Revenue on hypothetical basis computed MRP of goods cleared without any evidence of clandestine clearance or wrong MRP. Case of ABB Ltd. reported in 2011 (272) ELT (706) (Tri.-Bangalore) is relating to determination of R.S.P. Rule in respect of imported goods by Customs Officer. Tribunal has taken a view that Customs Officer has no po....
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....nto existence/force, whether or not list price can be adopted in the facts of the present cases. 24.1 At the outset, it is interesting to note that even after the present issue cropped up, appellants continue to clear the goods without declaring MRP but assessing the goods under Section 4A i.e. MRP basis and MRP is arrived at based upon List Price, VAT and Local Taxes. Appellants are disputing the List Price method for the period covered in these cases while adopting themselves the List Price for the subsequent period. Be that it maybe, we proceed to analyse the issue. 24.2 We note that appellants themselves are issuing Price Lists of all their products. These Price Lists are available to all Distributors, Stockist, Retailers. A retail consumer, when buys such goods is retail market, is shown Price List. Such Price List forms basis of transaction at all levels of supply chain viz. Appellants to Distributors, Distributors to Stockist, Stockist to Retailers and Retailer to ultimate consumer. For certain products, Revenue during the arguments demonstrated that even on the website of appellants, same price are indicated. Thus List Price is the price, notified to public also. 2....
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.... such goods shall be ascertained in the following manner, namely:- (i) if the manufacturer has manufactured and removed identical goods, within a period of one month, before or after removal of such goods, by declaring the retail sale price, then, the said declared retail sale price shall be taken as the retail sale price of such goods: (ii) if the retail sale price cannot be ascertained in terms of clause (i), the retail sale price of such goods shall be ascertained by conducting the enquiries in the retail market where such goods have normally been sold at or about the same time of the removal of such goods from the place of manufacture: Provided that if more than one retail sale price is ascertained under clause (i) or clause (ii), then, the highest of the retail sale price, so ascertained, shall be taken as the retail sale price of all such goods. Explanation.- For the purposes of this rule, when retail sale price is required to be ascertained based on market inquiries, the said inquiries shall be carried out on sample b....
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....n the present cases list price (with suitable adjustment for VAT/local taxes) is a very accurate and reasonable substitute for MRP and accordingly hold so. 25. Issue No.D. "Whether demands for the extended period of limitation are sustainable or not". Learned Brother has observed in para 19 above "19. As the appellants are having good case on limitation also as the appellants were having the understanding that the goods are meant for industrial/institutional use, they are not required to affix MRP. The issue was settled by the Hon'ble High Court of Bombay on Writ Petition filed by the appellants. Therefore, the extended period of limitation is not invokable." In case of appellant Siemens Ltd., in one notice extended period is invoked. It is seen that they had approached Director, Legal Metrology to exempt goods under Rule 34(a) on 20.3.2002 which was rejected on 30.4.2002. However, they took the matter the Hon'ble Bombay High Court after 6 years i.e. in 2008, which upheld the orders of Director, Legal Metrology. Similarly Larsen & Toubro Writ Petition was also filed in 2007, when they were clarified by Director, Legal Metrology in 2002 itself. The delay of fiv....