TaxTMI 
TaxTMI 
TaxTMI 
2018 (1) TMI 1014
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..... Brief facts are that M/s. SR Mineral Water Pvt. Ltd. (herein after referred to as M/s. SRM) are manufacturers of packaged drinking water under the brand name KINLEY and are registered with the Central Excise Department. They manufacture the said goods on job work basis for M/s.Hindustan Coca Cola Beverages (herein after referred to as HCCB). The duty was being discharged by M/s. SRM on the said goods based on MRP affixed as provided under section 4A of Central Excise Act,1944. Two different sale prices of Rs. 70/- and Rs. 50/- were adopted for the said goods and duty was discharged accordingly. The officers of Preventive Unit of Central Excise visited the factory premises on 6.11.2006. It was noticed that M/s. SRM was packaging KINLEY packaged drinking water in 25 lts. Packing with RSP of Rs. 50/- declared on the labels as institutional pack and on regular pack RSP of Rs. 70/- was declared. Even though two different RSPs were declared on the respective Institutional Pack and Regular Pack, it was observed that the quality of the product and quantity (25 ltrs) in the respective packs were the same and the packing jar and other packing materials used for the respective packs were of....
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.... did not gain any advantage in the form of reduction in price to RSP as Rs. 50/- per jar. Show cause notice was issued proposing to recover the differential duty along with interest and also for imposing penalties. After due process of law, the original authority confirmed the demand holding that RSP at Rs. 70/- declared by M/s. SRM and HCCB on the labels of 25 litre packages is incorrect, and RSP of Rs. 65/- (upto November 2004) and the RSP of Rs. 70/- (from December 2004 onwards) declared on the said goods regular pack to be the RSP for institutional pack also during the relevant period under section 4A of Central Excise Act, 1944. Differential duty demand was confirmed against M/s. SRM along with interest and imposed equal penalty. A penalty of Rs. 10 lakhs was imposed on M/s.HCCB who was a co-noticee for abetting M/s. SRM. In appeal, Commissioner (Appeals) upheld the same and hence the appellants are now before the Tribunal. 5. On behalf of the appellants, Shri M. Karthikeyan, ld. counsel made the following oral submissions:- 5.1 The authorities below had erred in interpreting the provisions of law and confirming the demands without appreciating the facts properly. Though it ....
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....ules and there is no room to decline the same by the department. 5.5 That only regular pack was intended for retail sale. The higher RSP of Rs. 70 was affixed on labels of regular pack and duty was discharged accordingly. The major supply was to institutional buyers which are admitted by department. The RSP on institutional pack is Rs. 50. Whenever there was shortage for supply of institutional pack, the regular pack was supplied to meet the need. That as the said regular pack having suffered duty on RSP of Rs. 70 it cannot be said that there is any evasion of central excise duty. The ld. counsel stressed on the point that the department has no case that when the goods are cleared by SRM to HCCB, the appellants have not paid excise duty corresponding to the RSP fixed on the jars. The allegation is raised merely for the reason that the appellant has declared two different RSP while clearing to institutional buyers and in the case of regular packs. The provisions of law contained in SWM (PC) Rules, 1977 or the Central Excise Act, 1944 does not prohibit clearing the very same goods under two RSP when they are cleared to different class of buyers. So long as the goods are not sold on ....
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.... Water, the distributor had gained substantially consequent to the adoption of reduced RSP of Rs. 50/-. He argued that two different RSPs in the same area is incorrect under Explanation 1 and 2 of Section 4A of Central Excise Act, 1944. That the demand raised is legal and proper. 6. Heard both sides. 7. The main allegation raised is that for the goods having same quality and quantity, the appellants have affixed different MRP for the distribution / supply in the same area. Explanation (c) of Section 4A provides that different sales price can be declared when the goods are sold in different areas. The defence taken by the appellant is that different MRP was affixed on the goods supplied in the same area because the supply was made to distinct class of buyers. One class being the institutional buyers and the other being the regular buyers (ultimate consumers). Undeniably in the case of packaged drinking water, MRP has to be affixed in the case of packets supplied to ultimate consumer and the duty has to be discharged on the basis of this MRP. Rule 34 of SWM (PC) Rules, 1977 provides that in the case of supply to institutional buyers, the RSP need not be affixed as the goods are not....