TaxTMI 
TaxTMI 
2024 (1) TMI 980
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....ise duty should be paid at the rates specified in the central excise tariff on the transaction value, i.e., the value at which the manufacturer sells the goods. However, an exception is carved out for certain goods which are covered under section 4A which reads as follows: "Section 4A. Valuation of excisable goods with reference 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 Legal Metrology Act, 2009 (1 of 2010) 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. ....
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.... sale price shall be the retail sale price for the purposes of valuation of the excisable goods intended to be sold in the area to which the retail sale price relates." 4. Thus, for the goods to be chargeable to central excise duty under section 4A: a) it must be necessary under the Legal Metrology Act and the Rules made thereunder to declare Retail sale price of those goods: and b) the goods should have been notified by the Central Government under section 4A. 5. If these two conditions are met, duty should be charged on the Retail Sales Price RSP with abatement as provided in the notification. 6. It is undisputed that the LED bulbs manufactured by the appellant were covered under section 4A and the appellant has been paying duty on the RSP with an abatement of 35% as per notification no. 49/2008. The appellant also manufactured and sold LED bulbs to the Energy Efficiency Services Ltd. EESL (which is a Government of India undertaking tasked to promote energy efficiency) under a contract at the contract price which was a much lower (at about Rs. 75/- per bulb compared to RSP of Rs.225/- per bulb) price. As per the conditions of the contract, the appellant....
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....er" means the institutional consumer like transportation, Airways, Railways, Hotels, Hospitals or any other service institutions who buy packaged commodities directly from the manufacturer for use by that institution. ii) "industrial Consumer" means the industrial consumer who buy packaged commodities directly from the manufacturer for use by that industry. 11. According to the Revenue, since EESL was not using the bulbs by itself but further selling them, it does not qualify as an 'institutional consumer' and hence sales to EESL are squarely covered by the Legal Metrology Act and consequently under section 4A of the Act. According to the Revenue, the appellant should have declared the RSP on the bulbs sold to EESL as per the Legal Metrology Act and since it failed to do so, the RSP should be determined as per The Central Excise (Determination of Retail Sale Price of Excisable Goods) Rules, 2008. 12. According to the Revenue, applying these Rules, the RSP to determine duty under section 4A shall be the same as the RSP for other bulbs sold in the market by the appellant. Accordingly, differential duty must be recovered from the appellant and extended period of limitat....
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....the goods were intended to be sold to ultimate consumers. This act has to be construed as willful misstatement. This act was a positive act on the part of the assessee to claim exemption from affixing MRP and consequently to escape assessment under Section 4A of the Central Excise Act. 65.3 Further, the assessee has not disputed the fact brought out in the notice that part of supplies to EESL were from retail outlets. It is clearly brought out in the show cause notice that point no. 10 (h) of the Letter of Award issued by EESL to the assessee states that "suppliers have to provide the details of the Retail outlets for bulk replacement within 10 days after completion of distribution for respective cities". Further point no. 10(i) of the said Award letter further states that "Suppliers have to maintain complaint register at their respective Retail outlet in order to keep bulb replacement record". These clauses in the LOA clearly reflect the fact that LED lamps were supplied to consumers for replacement from retail outlets and contradicts their claim that the LED bulbs had not been put up for retail sale. Thus, there was suppression of facts also. But for the present investig....
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....4A of the Act is not in dispute. It is also not in dispute that these, however, do not apply to sales to 'institutional consumers'. The only dispute is if EESL was an institutional consumer or not. Interestingly, both Revenue and the appellant had written to different offices of the Legal Metrology department asking if the sales to EESL are covered by the Legal Metrology Rules and if the RSP had to be declared. 17. The appellant got the following reply from the inspector of Legal Metrology department: " To, Surya Roshni Limited (Lighting Division) J7 to 711, Malanpur Industrial Area, Malanpur Bhind, MP Sub: Regarding MRP Under "UJALA" Scheme, LED LAMPS SURYA ROSHINI LTD (SURYA) Ref: Your Letter dated 21.10.2019 Dear Sir, It is to intimate in reference to the subject above that it is clear the letter and annexure sent by you that Surya Roshini Limited Malanpur Bhind is manufacturing LED Bulb of 7 Watt for UJALA, a scheme declared by the Energy Ministry for energy efficiency services. As EESL is the institutional consumer of Surya Roshini Limited, which is under Rule 2 (bc) of Legal Metrology (Package....
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....epartment in Bhopal and from the explicit clarification of the inspector of that department in Bhind, it is evident that in their opinion, the sales to EESL were not covered by the Legal Metrology Rules. 20. However, since the headquarters of the Legal Metrology Department only referred to the Legal Metrology Rules and did not state that the sales to EESL were covered by them or not, the central excise officers gave their own interpretation to the Legal Metrology Rules and raised the demand through the SCN. 21. According to the learned counsel for the appellant, this case is identical to the cases where the goods are sold on contract to the Canteen Stores Departments CSD of the armed forces who, in turn, sell them in retail to their employees. It has been held in the following cases that such sales are not covered by the Legal Metrology Rules and valuation does not have to be as per section 4A of the Act: (a) Charms Cosmetics Pvt Ltd. vs. Commissioner of Central Excise, Pune, 2017 (352) ELT 197 (Tri.-Mumbai) (b) Charms Cosmetics Pvt Ltd. vs. Commissioner of Central Excise, Pune-I, 2018 (5) TMI 2041-CESTAT MUMBAI (C) Wipro Limited vs. Commissioner of....
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....f these bulbs is explicitly prohibited. Therefore, these bulbs cannot fall under the same category as the bulbs which can be freely sold in the market and hence have a RSP. It is true that EESL was supplying these bulbs to consumers of electricity as per a scheme and was also collecting an amount from them but in our considered view that does not make it RSP as per Metrology Rules or as per section 4A. Extended period of limitation 25. Although we have found in favour of the appellant on merits, we also proceed to examine the question of limitation raised by the appellant. It is not in dispute that Section 11A provides for a limitation of one year for issuing the SCN. This period can be extended to five years in case the duty is not paid, short paid, not levied, short levied or erroneously refunded on account of fraud or collusion or willful statement or suppression of facts or violation of the provisions of Act or Rules with an intent to evade the payment of duty. In this case, the SCN alleges that the appellant had deliberately suppressed facts with intent to evade payment of duty and therefore, invoked extended period of limitation. The relevant paragraph of the show cause....
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....ble on removal (Rule 4). The assessee has to self- assess (Rule 6) the duty and pay it by the fifth day of the following month (Rule 8) and file Returns (Rule 12). The officers have to scrutinize the returns and can, for the purpose call for documents and records which the assessee is bound to produce. The relevant Rules are reproduced below: "Rule 4. Duty payable on removal.- (1) Every person who produces or manufactures any excisable goods, or who stores such goods in a warehouse, shall pay the duty leviable on such goods in the manner provided in rule 8 or under any other law, and no excisable goods, on which any duty is payable, shall be removed without payment of duty from any place, where they are produced or manufactured, or from a warehouse, unless otherwise provided Xxxxxxx Rule 6. Assessment of duty.- The assessee shall himself assess the duty payable on any excisable goods: Provided that in case of cigarettes, the Superintendent or Inspector of Central Excise shall assess the duty payable before removal by the assessee. Rule 8. Manner of payment. - (1) The duty on the goods removed from the factory o....