2008 (11) TMI 520 - AT - Central Excise

Summary

Issues involved: Applicability of duty under Section 4A of the Central Excise Act, 1944 on additional amount collected from dealers as insurance charges.

Summary:
- The appellants, engaged in manufacturing Ceramic Glazed Tiles, faced show cause notices for collecting additional amounts from dealers as insurance charges. After completion of adjudication, demands were confirmed for four financial years u/s 4A of the Central Excise Act, 1944, with abatement as per notification.

- No representation from the appellant; the learned SDR represented the Revenue. The appellants cited a Circular excluding transit insurance from assessable value, but the Tribunal found it irrelevant due to the duty collection based on MRP to avoid valuation disputes.

- The duty can be demanded only if goods are sold above MRP or if MRP manipulation is proven. As long as goods are sold at or below MRP, Revenue cannot investigate amounts collected by manufacturers. Previous Tribunal decisions supported this view.

- Citing precedents like Whirlpool India Ltd. v. CCE, Pondicherry and CCE, Patna v. Bharat Coca-Cola Bottling North East (P) Ltd., the Tribunal held that demanding duty on transit insurance collected from dealers was not lawful. The appeals were allowed in favor of the appellants.