TaxTMI 
TaxTMI 
2007 (2) TMI 35
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.... On 1st March, 2003, the Central Government in exercise of its powers under sub-section (1) and (2) of Section 4A of Central Excise Act, 1944 issued a Notification bearing No.10/2003-CE (NT) dated 1-3-2003 to include all items falling under sub-heading 3808.10 of the Central Excise Tariff Act, 1985 for valuation on the basis of maximum retail price under Section 4A of Central Excise Act, 1944. In view of this notification, the appellants started paying duty on pesticides of 100 ml packing sold to persons other than M/s. Mahyco Monsanto Biotech (India) Pvt. Ltd. on the basis of maximum retail price as per Section 4A of the Act. However, in respect of the goods being sold in bulk though in individual packing of 100 ml to M/s. Mahyco Monsanto Biotech (India) Pvt. Ltd., the appellants continued to value the same under Section 4 of the Act at transaction value on the understanding that since these packs were not intended for retail sale and also did not bear any retail price, the same shall not come under the purview of Section 4A. Similar agreements were entered into with M/s. Mahyco Monsanto Biotech (India) Pvt. Ltd. for subsequent period and selling pattern continued to be the same. ....
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....ded for retail sale and expression "package", wherever it occurs in this chapter shall be construed accordingly. Therefore, it was submitted that the subject provisions apply only if the packages are intended for retail sale. The retail sale has further been defined under Rule 2(q) of Standards of Weights and Measures (Packaged Commodities) Rules, 1977 as "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 individual or a group of individuals or any other consumer". It was submitted that since the pesticides supplied to M/s. Mahyco Monsanto Biotech (India) Pvt. Ltd. were not intended for sale but for free distribution by M/s. Mahyco Monsanto Biotech (India) Pvt. Ltd. they were not covered by the provisions of Standards of Weights and Measures (Packaged Commodities) Rules, 1977 and were under no obligation to declare maximum retail price and therefore the provisions of Section 4A in respect of the supply made to M/s. Mahyco Monsanto Biotech (India) Pvt. Ltd. were not attracted. In support, he refers to the clarification issued by the CBEC vide Circular No.....
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.... Law, who have opined that valuation of telephone instruments supplied in bulk to the telephone deptt. will be done as per Section 4 of the Central Excise Act, 1944 and the instruments sold in the market, with printed MRP, would be assessed u/s 4A of the Act. The Ministry has accepted the opinion of the Law Ministry." 5. In view of the above circular, it was stated that their case is fully covered by the above clarification and since the packages sold to M/s. Mahyco Monsanto Biotech (India) Pvt. Ltd. were not meant for retail sale, there was no requirement to declare the MRP on the packages neither it was so declared and therefore the provisions of Section 4A were not applicable. 6. Reference was thereafter was invited to the Tribunal's decision in the case of G.S. Enterprises v. CCE, Jaipur - 2004 (172) E.L.T. 31 (Tri. - Del.) where razors were distributed free, along with shoe polish without bearing any MRP and it was held that in view of the Board's Circular No. 625/16/2002-CX., dated 28-2- 2002, the goods when supplied free with another consumable item as marketing strategy without mentioning MRP on the packets are to be valued under Section 4 of Central Excise Act, 1944 and ....
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....mitted that in their case, the goods were not intended for retail sale and were meant for exclusive use of cotton seed industries who supplied the same to the farmers for better yield and in that sense it can be said that to be servicing the needs of the customers i.e. farmers which is an agricultural industry and there fore they fall in the exception provided under Rule 34(a) of the Standards of Weights and Measures (Packaged Commodities) Rules, 1977. 9. Lastly it was submitted that as per Section 4A(4) in case the goods are removed from the place of manufacture, without declaring retail price of such goods on the packages then the retail sale price of such goods is required to be ascertained in the prescribed mariner and such price shall be deemed to be retail sale price for the purpose of that section. No rules have been framed so far for determining the retail sale price in such cases and therefore the adjudicating authority could not have adopted the MRP of similar other products. Argument was also made on the limitation on the ground that they had no intention to evade duty and it was their bona fide belief that since the goods are not meant for retail sale they were not cov....
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....tandards of Weights and Measures Act, 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. We find that the Board's Circular dated 28-2-2002 and various CESTAT's decisions both for and against the appellants accept this principle that the goods should be one in respect of which there is a statutory requirement under the provisions of Standards of Weights and Measures Act to declare the retail sale price on the packages. However, while one set of decisions hold that once the goods are specified by Notification issued under Section 4A(1) of Central Excise Act, 1944 they are governed by MRP based assessment irrespective of the fact that whether they are actually sold or intended for sale in retail unless they come under one of the exceptions provided under Rule 34 of Standards of Weights and Measures (Pack aged Commodities) Rules 1977, the other set of decisions holds that once the goods are not meant for retail sale and are sold in bulk, there is no requirement to declare the maximum retail sale price under the provisions of Standards of Weights and Measures Act and accordingly th....