TaxTMI 
TaxTMI 
2015 (10) TMI 1026
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....nal quantity, in another pack, called as bonus/promo pack, against the same MRP. For example, the packs containing of 4.5 ltrs. of Lub. oil cleared at an MRP and lubricating oil with 5 ltrs. Pack, called as bonus/promo pack cleared with the same MRP. Revenue issued show cause notices to the appellant alleging that since the additional quantity of lubricating oil cleared in the bonus/promo pack had not suffered duty, accordingly duty was recoverable on the said additional quantity of Lub. Oil cleared in the same pack. On adjudication, differential excise duty of Rs. 1,30,14,474/- had been confirmed and penalty of equal amount was imposed under Section 11AC of Central Excise Act, 1944, along with direction for recovery of interest under Section 11AB of Central Excise Act, 1944. Hence, the present appeal. 4. Shri D.Arvind, ld.C.A. for the appellant submits that during the relevant period their product was notified under The Standards Weights and Measures Act read with the Standards of Weights and Measures (Packaged Commodities) Rules, 1977 hence, they discharged excise duty, on the assessable value, as per Section 4A of Central Excise Act, 1944. He submits that during lean period, ....
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.... ELT 101 (Tri.-Bangalore). 5. Further he has submitted that the decision of the Larger Bench in the case of Indica Laboratories Pvt.Ltd. vs. CCE, Ahmedabad - 2007 (213) ELT 20 (Tri.LB) is not applicable to the facts of the present case, inasmuch in that case the appellants are manufacturer of P & P Medicines falling under chapter 3003 of CETA and were indicating the MRP on the packages in terms of the provisions contained in Drugs (Price Control) Order, 1955 (DPCO). The appellant cleared 25 boxes free along with 100 boxes and the boxes which are allowed free also contained the MRP printed on each box as the same were required to be printed as required under DPCO. It is his submission that in the present case the additional quantity are not cleared in separate packs affixed with MRP, therefore, the said judgement is not applicable to the facts of the present case. 6. Per contra, the ld.A.R. (Commissioner) for the Revenue submitted that the additional quantity cleared in the promo packs had not suffered duty, inasmuch as, when a comparison is made between the bonus/promo packs and the normal pack, even though at the same MRP printed on both, but, the price at which unit quantit....
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....t forth in the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986);] 9. The manufactured or produced goods are subjected to excise levy which are broadly measured taking into consideration, its physical properties, namely, weight, volume, length, etc. or the value of the goods. The former one is described as specific rate of duty and the later one is as ad valorem rate of duty. Specific rate of duty is independent of the value, that is the price at which it could be sold; similarly, the value is independent of the physical characteristics of the goods i.e. its volume, weight, length etc.. Both methods are mutually exclusive. In the present case, the lubricating oils are subjected to ad valorem rate of duty. In other wards, it is the value of the goods which is relevant for determination of the quantum of duty applicable to the quantity of goods manufactured and cleared from the factory. 10. Prior to 01.7. 2000 the value of the goods chargeable to ad valorem rate of duty, was determined on the basis of normal whole sale price at which such goods are sold; however, after 01.7. 2000, transaction value has become the basis to ascertain the assessable value. The amen....
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.... 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 declared on the package of such goods after their removal from the place of manufacture, then, such goods shall be liable to confiscation and the retail sale price of such goods shall be ascertained in the prescribed manner and such price shall be deemed to be the retail sale price for the purposes of this section. 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 and the price is the sole consideration for such sale: Provided that in case the provisions of the Act, rules or other law as referred to in sub-section (1) require to declare on the package, the retail sale price excluding any taxes, local or otherwise, the retail sale price shall b....
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....he appellant in their bonus/promo pack is not the correct MRP, hence as per the provisions of section 4A, the same requires to be re-determined and consequently the same is arrived at by applying the pro-rata value to the additional quantity of lub. Oil contained in the said pack. 15. We are unable to persuade ourselves to accept any of the aforesaid reasoning. The first one is fallacious inasmuch as the ld. Commissioner has himself observed that the present goods are notified under section 4A and its assessable value is to be determined under Sec.4A and not under section 4 of the Central Excise Act, 1944; hence, the additional quantity or reduction in price from the declared MRP allowed by the Appellant to promote their business cannot be equated to the principle of law laid down by the Hon'ble Supreme Court in Bombay Tyres International's case(supra) on the inclusion or exclusion of certain expenditures in the assessable value, as the said principle was laid down in the context of Sec. 4 of CEA,1944. The second reasoning also devoid of merit in as much as in section 4A, it is laid down that if the MRP is not affixed as per provisions of The Standards of Weights and Mea....