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2018 (6) TMI 562 - AT - Central ExciseValuation of Colour Television Sets - clearance to another company for distributing the same to general public for free of cost under a government policy - Transaction value u/s 4 or MRB based value u/s 4A of CEA? - Held that - Coordinate Bench of this Tribunal in the matter of M/s PG Electroplast Ltd. Vs. Commissioner of Central Excise, Noida 2014 (7) TMI 575 - CESTAT NEW DELHI , has held that the activity of free distribution of CTVs among poorer section of the population of Tamil Nadu on behalf of the Govt. of Tamil Nadu, cannot be called service industry as it is not a commercial activity thus they are not institutional consumers and hence the valuation of goods was held to be correct under Section 4A of the CEA, 1944 - appeal allowed - decided in favor of appellant.
Issues Involved: Valuation of Colour Television Sets (CTVs) under Section 4A vs. Section 4 of the Central Excise Act, 1944 for distribution to the general public for free under a government policy.
Analysis: Issue 1: Valuation under Section 4A vs. Section 4 of the Central Excise Act The appeal pertains to the valuation of CTVs cleared for free distribution under a government policy. The Appellant, engaged in manufacturing CTVs, valued the goods under Section 4A of the Central Excise Act, 1944, while the Revenue contended that valuation should have been done under Section 4 of the Act. The Revenue argued that the entity receiving the CTVs qualified as 'institutional consumers' under the Weights and Measures Rules, thus excluding them from Section 4A valuation. The period in question saw a demand of ?68,13,766/- along with interest and penalties imposed on the Appellant based on the Revenue's valuation method. Issue 2: Precedent and Tribunal Decision The counsel for the Appellant cited a previous decision by a Coordinate Bench of the Tribunal in the case of M/s PG Electroplast Ltd. vs. Commissioner of Central Excise, Noida. In that case, it was established that the entity receiving the CTVs for free distribution did not qualify as an 'institutional consumer' under the Weights and Measures Rules. The Tribunal held that the distribution of CTVs to the public, especially the poorer sections, did not constitute a commercial activity, and thus, the valuation under Section 4A was deemed appropriate. Judgment: After considering the arguments and the precedent set by the earlier Tribunal decision, the Appellate Tribunal CESTAT ALLAHABAD, comprising Mr. Anil Choudhary and Mr. Anil G. Shakkarwar, ruled in favor of the Appellant. The Tribunal found that the issue was no longer open to debate and was conclusively settled by the previous decision. Consequently, the impugned order was set aside, and the appeal filed by the Appellant was allowed. The Tribunal also noted that the Appellant was entitled to consequential relief as per the law. The Misc. Application was disposed of as infructuous, bringing a resolution to the valuation dispute over the CTVs distributed under the government policy.
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