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2024 (9) TMI 1490
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....Ceramics ; Shri R Kumar ; Shri Divyeshbhai N Patel ; Shri Arvindbhai N Patel ; Oracle Granito Ltd. ; Vinodbhai Maganlal Patel ; Ashwin Maganlal Patel ; Dharmendrabhai Patel ; Nice Ceramics Pvt Ltd. ; Santro Tiles Ltd. ; Prakashbhai Dahyabhai Patel ; Shri Manshuklal Mavjibhai Patel ; Mahendrabhai Amichandbhai Patel ; Kamleshbhai Bhagubhai Patel ; Hasmukhbhai Danjibhai Patel Versus Commissioner of Central Excise & Service Tax - Rajkot HON'BLE MEMBER (JUDICIAL), MR. RAMESH NAIR And HON'BLE MEMBER (TECHNICAL), MR. RAJU Shri P.D. Rachchh, Nirav Shah, Amal Dave, Parth Rachchh, with Ms. Krati Jain, Advocates for the Appellant Shri Rajesh Nathan, Authorised Representative for the Respondent ORDER RAJU These appeals have been filed by various manufacturers of tiles against demand of central excise duty and imposition of penalties. 2. Similar issues were earlier decided vide the decision in the case of Acme Ceramics vs Commissioner of Central Excise, 2014 (303) ELT 542 (Tri. Amd.). In the said decision, following was held: "8. We have considered the detailed submissions made by both sides and perused the records as also the written submissions filed by b....
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....ding 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. (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 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....
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.... marketable to the consumer; and the word "manufacturer" shall be construed accordingly and shall include not only a person who employs hired labour in the production or manufacture of excisable goods, but also any person who engages in their production or manufacture on his own account; (g) "prescribed" means prescribed by rules made under this Act; 12. For the period prior to 1-3-2008, we have to record that the provisions of sub-section (4) of Section 4A were enacted in the statute which is reproduced hereinabove, if read, would indicate that if the manufacturer declares retail price which is not the correct retail price as required to be declared under the provisions of the Act, then the ascertainment of such retail sale price will be done in a prescribed manner. We fine that though the provisions of sub-section (4) of Section 4A was brought into statute from 14-5-2003, how to redetermine the RSP in the case of misdeclared RSP was not "prescribed" by the Central Government till the issuance of Notification No. 13/2008-C.E. (N.T.), dated 1-3-2008. This would effectively mean that the Legislature in its wisdom has considered a situation wherein the RSP ....
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....f Gulam Mohammad & Anr v. State of Bombay & Others - AIR 1962 SC 97. We also find that if the Legislature prescribes that if the thing is to be done in a particular manner, then the same has to be done in the stated manner only, is the law which is settled by the Apex Court. We find that our this view is fortified by the decision of the Co-ordinate Bench of the Tribunal in the case of M/s. Ravi Foods Pvt. Ltd., wherein similar issue came before the Bench. In the case of M/s. Ravi Foods Pvt. Ltd., the Revenue sought to redetermine the RSP of the goods which were covered under the provisions of Section 4A of the Act, by adding the value/amount received not accounted for by the appellant therein. The relevant paragraphs from the said judgment are reproduced herein below. 12. We find that the provisions of Section 4A during the relevant period needs to be considered for coming to a conclusion whether the amount quantified by the authorities in the show-cause notice as indicated hereinabove would stand test of law or not. The provisions of Section 4A are as under :- SECTION 4A. Valuation of excisable goods with reference to retail sale price. - (1) The Central Governme....
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....lare on the package, the retail sale price excluding any taxes, local or otherwise, the retail sale price shall be construed accordingly. Explanation 2. - For the purposes of this section, - (a) where on the package of any excisable goods more than one retail sale price is declared, the maximum of such retail sale prices shall be deemed to be the retail sale price; (b) where the retail sale price, declared on the package of any excisable goods at the time of its clearance from the place of manufacture, is altered to increase the retail sale price, such altered retail sale price shall be deemed to be the retail sale price; (c) where different retail sale prices are declared on different packages for the sale of any excisable goods in packaged form in different areas, each such retail 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. 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 pe....
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....3/2008-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" means the Central Excise Act, 1944 (1 of 1944); (b) "retail sale price" means the retail sale price as defined in Section 4A of the Act; and (c) Words and expressions used in these rules and not defined but defined in the Act or any other rules made under the Act shall have the meaning as assigned therein. RULE 3. The retail sale pr....
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....ble 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 strong force in the contention raised by the learned Counsel that the decision of the Tribunal in the case of Aditya Cement (supra) would squarely cover the issue in favour of the appellants. The relevant ratio in Para 9 of the said decision is reproduced :- "9. It can be seen from the above reproduced rule that it was in context of the definition of "person liable for paying the Service Tax". This provision in itself may not suffice revenue to direct the app....
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....duty on an assessee on the ground of undervaluation in respect of goods covered under Section 4A of Central Excise Act, 1944. 15. In the case before us, the question of undervaluation would not arise, and assuming even if it arises, during the relevant period (in this case prior to 1-3-2008) there was no procedure under Section 4A of the Central Excise Act to demand the duty, as the said procedure came into statute from 1-3-2008 only. As regards the finding by the ld. adjudicating authority that suppression could be on account of volume, we have already recorded that there is no corroborative evidence nor there is any finding as to the exact quantity of goods clandestinely cleared to come to the conclusion that the value of Rs. 3.75 crores is attributable to the specific quantity of goods on amount of clandestine removal. In the absence of any such details, we are of the considered view that the impugned order is unsustainable. 16. Before parting with the case, we would like to record that since we disposed off all the appeals only on the merits of the case, we are not recording any finding on the other submissions made by both sides on various issues. 17....
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....vernment may make rules not inconsistent with the provisions of the Act and rules made thereunder. The Uttar Pradesh State Government has framed Central Sales Tax (U.P. Rules) 1957, in exercise of the powers conferred under the CST Act, 1956, and Rule 9 of the said Rules provided that the provisions of Uttar Pradesh Sales Tax Act, 1948 and U.P. Sales Tax Rules, 1948 as amended from time to time or the rules made thereunder would apply to the dealer liable for assessment under Central Sales Tax Act and U.P. Sales Tax Rules, 1948, Rule 44(B) prescribed the manner of determining the turnover of the goods involved in execution of Works Contract. The relevant findings of the Apex Court were rendered on this factual aspect as contained in Para 27 of the judgment. In our considered view, the ratio decidendi from this judgment is that merely because the rules were not framed in Central enactment, it would not mean that no tax is leviable if rules have been framed under said enactment and there is a provision for referential incorporation of the said act in the Central Act. We are of the view that the ratio laid down by Apex Court in the case of M/s. Mahim Patram Pvt. Ltd. does not in any m....
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....RP; no question was put any of the dealers as to who altered the RSP declared on boxes of glazed/vitrified tiles. In our considered view, this clinching evidence has not been recorded by the investigating authorities, for the reasons best known to them. If there would have been any evidence in any form as to who altered the RSP, then the duty liability in our considered view, gets crystallized in the hands of such persons as goods become manufactured goods; is the law which can be deduced from the provisions of Central Excise Act, 1944. In the absence of any evidence suggesting as to who altered the MRP on the boxes of tiles, we are of the view that the Revenue authorities cannot turn around and take a stand that the manufacturers are liable to duty, which would effectively mean that they are the persons who have altered the RSP. Yet another angle to the entire case is absence of evidence as to there being alteration of RSP; inasmuch as when the investigations were conducted by the authorities, we find that the investigating authorities have not seized a single carton of the offending goods in the Pan India operation at different dealers" premises, wherein different RSP was declare....
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.... correct, even then the total consideration earned by the manufacturer even after including the other elements of cost, seems to not exceed the declared RSP at Morbi. This aspect, in our considered view, needs greater verification, if necessary, after granting cross-examination especially in the light of the facts that the documents have been recovered from the premises of third party who have not been made noticee. If after going through the evidence and statements, it is felt that there is, in fact, evidence of extra cash consideration, then it will have to be seen whether the declared RSP at Morbi was proved to be false to the knowledge of manufacturer or not. If the declared RSP is found to be false to the knowledge of manufacturer at Morbi, then RSP will have to be determined in the manner prescribed in the rules which have been enacted w.e.f 1-3-2008, instead of being determined in any other manner. To that extent, we remand the matter to the adjudicating authority for reconsideration of determining the RSP post-1-3-2008 as per the directions hereinabove and in accordance with law. The adjudicating authority will follow the principles of natural justice before coming to any c....
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....ision bench, division bench of Ahmedabad Tribunal referred the following additional questions to be decided by Larger Bench. "3. Subsequently, while deciding an application filed for rectification of mistake in the aforesaid order dated 10.01.2019 of the Division Bench, a Division Bench of the Ahemdabad Bench of the Tribunal referred the following additional issue to be decided by the Larger Bench: "(3) In the facts and circumstances of the case, if the evidence establishes that the RSP was manipulated fraudulently at the behest of the appellant by any other person, can the liability of duty be fastened on the appellants." The aforesaid questions were answered in the following manner by the Larger Bench vide Interim order No. 1-23 of 2024 dated 23.01.2024: "90. The reference made by the Division Bench to the Larger Bench of the Tribunal is, accordingly, answered in the following manner: (i) It is not permissible to ascertain the retail sale price of goods removed from the place of manufacture, without declaring the retail sale price of such goods on the packages or declaring a retail sale price which is not the retail sale price or tampering w....