TMI Blog2013 (10) TMI 397X X X X Extracts X X X X X X X X Extracts X X X X ..... ral Excise Rules, which would be in proportion to the quantum of duty demand confirmed against the assesse. - E/1432/2005 - A/1353/2012-EX(BR)(PB) - Dated:- 3-12-2012 - Ajit Bharihoke and Shri Rakesh Kumar, JJ. Shri B.L. Narsimhan, Advocate, for the Appellant. Shri Sanjay Jain, Jt. CDR, for the Respondent. ORDER The facts leading to this appeal are, in brief, as under :- 1.1 The appellant during the period of dispute i.e. period from Feb. 2003 to March, 2003, manufactured VCD players and also different models of colour T.V. sets. Both these items were chargeable to duty on the value determined under Section 4A on the basis of the MRP declared on their packages. The appellant during this period cleared combination packs of certain models of CTVs along with VCD players, the VCD being given free along with those models of CTVs. The duty was paid by the appellant on the value determined on the basis of MRP of the combo pack of the CTVs along with VCD players. The Department was of the view that since the VCD players had been given as free on sale of certain models of CTVs, the MRP of the combo pack of the CTVs and the VCD players was the MRP of CTVs only and as such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e combination pack, when MRP had been declared for the combo pack of CTV with VCD player, that when two products manufactured by a manufacturer, both of them notified under Section 4A, are cleared as a combination pack on a combined MRP, in accordance with the judgment of the Tribunal in the Millennium Appliances India Ltd. v. CCE reported in 2009 (248) E.L.T. 713, duty is payable on the value determined on the basis of combined MRP and not the sum of the MRPs of both the products, even though the MRP of the combination pack may be less than the sum of the MRPs of the individual products, that the Tribunal in the case of Surya Food and Agro Ltd. reported in 2003 (156) E.L.T. 488 (Tribunal) has held that when a manufacturer who supplies particular units of excisable goods along with certain articles stated to be gift articles without charging separate amount for the same, the manufacturer would not meet the cost from his pocket and he would include the cost of the gift of bonus article in the cost structure of the excisable goods delivered and the value of the articles supplied as free gift is not required to be included in the value of the excisable goods sold, that ratio of this j ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt has correctly taken the same as Rs. 3325/- per VCD, that the Tribunal in the case of G.S. Enterprises reported in 2002 (144) E.L.T. 387 (T) where a combo pack of 5 blades and one razor [razor manufactured by M/s. G.S. Enterprises and blades manufactured and supplied by Indian Shaving Products Ltd. (ISPL)] had been cleared for retail sale at MRP of Rs. 23/- (MRP being for 5 blades with one razor supplied free), has held that the razor being supplied free along with 5 blades would be chargeable to duty by taking its MRP as Rs. 10/- as ISPL were selling the razor with MRP of Rs. 10/- that this judgment of the Tribunal has been affirmed by the Apex Court vide judgment reported in 2003 (151) E.L.T. A297, that the ratio of this judgment, as affirmed by the Apex Court, is squarely applicable to the facts of this case and. therefore, the duty has been correctly demanded in respect of the clearances of VCD players. He, therefore, pleaded that the confirmation of the duty demand and imposition of penalty on the appellant has been correctly upheld. 5. We have considered the submissions from both the sides and perused the records. The undisputed facts are that the appellant manufactured v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase as, in this case the VCD players had been supplied free on sale of certain models of CTVs. In such circumstances, it would not be correct to conclude that the value of the VCD players is included in the value of the CTVs. When the appellant have manufactured VCD players, the duty would be chargeable at the time of their clearances irrespective of whether the same are cleared as such or are cleared along with CTV sets and irrespective of whether the same are cleared on sale or are cleared as free supply to be given as free gift along with sale of certain models of CTVs. For example, duty is charged on physician s samples cleared by a manufacturer even though, the same are meant for free distribution among physicians for promoting the sale of the medicines. While the price of CTV is not required to be loaded with the price of VCD supplied free, as the sales consideration for any goods sold is what flows for the buyer to the seller and not from seller to the buyer, this cannot be the reason for not charging duty on the item supplied free, if the free supply item has also been manufactured by the same manufacturer. The issue of levy of duty under Section 3 of the Central Excise Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase, the MRP declared by the appellant has to be treated as MRP of the CTVs only and not the combined MRP of the CTV and the VCD players supplied free and the duty would be chargeable separately on the VCD players. Since during the period of dispute the MRP of the VCD were not available, the same has to be ascertained by adopting a reasonable criteria. 8. However, we find merit in the appellant s plea that the department has adopted the MRP of Rs. 3325/- per piece in respect of VCDs which admittedly was the MRP in 2001 while during 2003, there was drastic reduction in the prices of this item and also that no abatement has been given from the MRP of Rs. 3325 adopted by the Department. According to the appellant, reasonable MRP of the VCD during the period of dispute would be around Rs. 2500/- and after 40% abatement, the assessable value would come to Rs. 1500/- per piece while the duly has been charged on the assessable value of Rs. 3325/- per piece. We are agreed with the plea of the appellant that MRP of VCD prevailing during 2003 must be adopted and assessable value must be determined after 40% abatement from the MRP. The Appellants, plea that during the period of dispute, the ..... 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