TMI Blog2014 (1) TMI 1642X X X X Extracts X X X X X X X X Extracts X X X X ..... n (2) reveals that two conditions are required to be satisfied for application of Section 4A. The first condition is that there should be a requirement under the Standards of Weights and Measures Act, 1976 or the Rules made thereunder or under any other law for the time being in force to declare the RSP on the packages of the goods. The second condition is that the goods should be notified under sub-section (1) of Section 4A. If these two conditions are satisfied, then notwithstanding anything contained in Section 4, the value for the purpose of assessment of duty will be the retail sale price minus the amount of abatement, if any, as specified by the Central Government. Therefore, once the goods are specified under Section 4A(1) and there is a statutory requirement to declare RSP on the retail sale packages of the goods, the question of application of Section 4 would not arise at all. In the present case, there is no dispute on the fact that on the retail packages the appellant-manufacturers were required to declare the RSPs and the goods were also notified under the provisions of Section 4A(1). If that be so, it cannot be contended that the valuation of the goods have to be d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent case, the charging section is Section 3 of the Central Excise Act and the rate of tax is prescribed in the Schedule to the Central Excise Tariff Act, 1985. The value for the purpose of assessment is the retail sale price as defined in the Explanation 1 to Section 4A of the Act. Thus, the taxable event, the rate of tax, the measure of the tax and the person liable to pay tax are separately provided for in the various provisions of the Central Excise Act, 1944 and the Rules made thereunder. Rules, 2008 apply only to a limited situation where the manufacturer fails to declare the RSP or tampers with or obliterates the RSP already declared. Therefore, the provisions are merely procedural and directory in nature and hence has retrospective operation. - charging section provides for the levy, the rate of tax is specified in the schedule, the person liable to pay the tax is the manufacturer of the goods under Rule 4 of the Central Excise Rules, 2002 and the measure of tax is defined under Section 4A. Thus, all the core ingredients of the tax system is specified in the law. The Rules 2008 merely provides for ascertainment of the measure of tax in a situation where it is not declared. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ely defies a statutory requirement, can they be allowed to get away with it and obtain the benefit under some other law. Appellant have deliberately contravened the provisions of Standards of Weights and Measures Act and the Packaged Commodities Rules made thereunder. Therefore, they have to suffer the consequences of the contraventions. For such contraventions the appellant cannot claim benefits under the provisions of Central Excise Act by holding that the appellant was not liable to discharge excise duty under Section 4A of the Central Excise Act. In the present case, a deliberate contravention of the Standards of Weights and Measures Act in utter disregard to the law was also a contravention under the provisions of Central Excise Act and these contraventions had been committed by the appellant with an intention to evade payment of legitimate Central Excise duty. In these circumstances, the invocation of extended period of time is completely justified and, therefore, the main demands made invoking the extended period of time is clearly sustainable. The appellants also resorted to subterfuge by making misdeclarations on the packages that they are meant for industrial consum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s required affixation of retail sale price. Prior to 1990, as the goods are classified under Chapter Heading 8536 of the First Schedule to the Central Excise Tariff Act, 1985 were notified for MRP based assessment w.e.f. 1-3-2002 vide Notification No. 13/2002-C.E. (N.T.), and thereafter, under Notification No. 2/2006-C.E. (N.T.) as per these Notifications the assessee is entitled an abatement of 40% from MRP to arrive the assessable value. The contention of the appellant is that their products were not covered by P.C. Rules relating to MRP Rules, the product did not classify as pre packed commodity and were not sold by weight, measure or number. The appellants were also making the following declaration on the packing Specially packed for the exclusive use of any industry as a raw material or for the purpose of servicing of any industry, mine or quarry. For industrial use only and not intended to be displayed for sale at a retail outlet . The appellants are also having printed price list which is called as list price for all the products sold by them to their dealers. The list price forms the basis for arriving at the sale price between the appellants and their dealers, the appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fix MRP on their products as per the Rule 2(1) of the Standards of Weights and Measures (Packaged Commodities) Rules, 1977 as amended as on the premise that the declaration of retail price was not necessary in respect of these products which were not intended to be sold in retail and were meant for industrial obligation and declaration was made to this effect as they were used manufacturer of control panel. The show cause notices were issued to the appellant and the vendors on the premise that as the appellant are not discharging their duty liability as per Section 4A of the Act. Therefore, demand for differential duty was confirmed against the appellant. M/s. Siemens Ltd. :- The appellants are manufacturer of different lines of electric switchgear one type of switchgears are sold for industrial use and are sold to industrial user. Other types of switchgears are sold for home/office purpose, the appellants are paying duty on the switchgear meant for domestic/office use under Section 4A of the Act, but though switchgears are meant for industrial use and are sold to industrial users, duty is being discharged as per Section 4 of the Act. Revenue is of the view that as the goods man ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le 1(3) of the Standards of Weights and Measures (Packaged Commodities) Rules, 1977 for this reliance was placed on the following decisions. (i) Philips India Limited v. Union of India - 2002 WLR 140; (ii) Eureka Forbes Ltd. v. Union of India, AIR 2003 AP 275; (iii) Titan Industries Ltd. v. Union of India, AIR 2006 Bom. 336, (iv) Subhash Arjandas Kataria v. State of Maharashtra, AIR 2006 Bom. 393; (v) Pieco Electronics Electricals Ltd. v. Union of India and Ors., vide order of the Hon ble High Court of Kerala dated 26-8-2002 in O.P. No. 14701/1994; (vi) Pieco Electronics Electricals Ltd. v. Union of India and Ors., vide order of the Hon ble High Court of Andhra Pradesh dated 5-9-2002 in W.P. No. 11966/1991; (vii) Controls and Switchgears Contractors Ltd. v. CCE, Noida, 2005 (183) E.L.T. 95; (viii) Controls and Switchgears Contractors Ltd. v. CCE, Noida, 2006 (201) E.L.T. 574; (ix) India Cine Agencies v. CCE, Pondicherry, 2007 (220) E.L.T. 815. 5. The another issue raised by the ld. Counsel for the appellant is that Central Excise (Determination of Retail Sales Price of Excisable Goods) Rules, 2008 int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cision of Larsen Toubro Ltd. of the Hon ble High Court is not a good law. 8. All the Counsels for the appellants submit that on the following grounds the demand are not sustainable. Therefore impugned orders are to be set aside. 9. In alternate it is submitted that the demands for extended period of limitation, (in the case of Schneider Electric India Pvt. Ltd.), the adjudicating authority has already dropped and the appellants were under the bona fide belief that the products are meant for industrial use and not required to affix MRP and same were cleared on payment of duty under Section 4 of the Act, therefore, the demands for extended period of limitation in the case of Larsen Toubro Ltd. and its vendors and Seimens are not sustainable. 10. On the other hand the contentions of the appellants were strongly opposed by the ld. AR appearing on behalf of the Revenue and submits that the writ petition filed by M/s. Larsen Toubro Ltd. before the Hon ble High Court had considered all relevant submissions with regard to non-applicability of the provisions of P.C. Rules in respect of impugned goods, both before the amendment to the said Rules w.e.f. 1-3-2007 or thereafter a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds, and in case of any goods which are sold at different prices, the maximum of any of its retail sale price is liable to be adopted as the retail sale price in terms of Section 4A(4)(a) Explanation-1 to read with Explanation-2 sub-clause (a). Therefore, the spirit of the law can be cured out from such provisions that the maximum of any retail sale price has to be ascertained and adopted for the purpose of levy of duty. Therefore, the Revenue is free to adopt any reasonable means to ascertain the maximum retail price by means of market enquiries or otherwise. The MRP ascertained by the Revenue has been adopted for demand of MRP in terms of Section 4A. In such circumstances, it cannot be the appellant s case that such MRP were merely notional. Such a price cannot be deemed to be beyond the realm of reasonableness as has been the spirit of the decision of the Mahim Patram Private Ltd. v. Union of India reported in 2007 (7) S.T.R. 110 (S.C.). It is further contended that attempt on the part of the appellants to adopt the three invoices referred to by the Advocates of the appellants during the hearing to establish a case of sale of such goods to other than industrial or institutional c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n their marketing chain continues to guide the stockists as well as the retailers as to the maximum retail sale price, shall make a valid basis to ascertain and determine the MRP for the purpose of Section 4A, ibid. Thus, the MRP, excluding the local taxes octroi, ascertained by the original authority, duly supported by the appellant s own documentation corroborated by stockists evidences is most reasonable and valid basis against which no valid submission could be made by the appellants. 12. On limitation it is submitted that the appellants have attempted to take cover of an alibi in the forms of other case laws on the different products, including one pertaining to similar switchgears. There is a need to appreciate that the appellants herein were well aware that there products invited the provisions of Section 4A, ibid especially owing to themselves adopting such MRP based valuation in respect of same products, their product of like category, manufactured marketed by the main appellants as stated by the stockists as is evidenced by the extracts from the product sales material. Therefore extended period of limitation is invocable. Therefore impugned orders to be upheld and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gment in the case of West Coast (supra) is not a precedent for the ratio that a judgment losses its precedent value if stayed by a Superior Court, the said judgment was on the issue of commencement of the period of limitation for filing suit, whether from the date of passing of original decree or from the date of passing of appellate decree by a Superior Court. While deciding this question, while holding the period from which writ petition was pending before the Superior Court was excludable for computing period of limitation, in that context, it was observed by the Hon ble Apex Court that on admission of appeal correctness or otherwise of judgment impugned becomes wide open and is in jeopardy. In the case of B.S. Refrigerators Ltd. (supra), neither the judgment of the Hon ble Apex Court in the case of Shri Chamundi Mopeds Ltd. (supra) nor the judgment of Hon ble Bombay High Court in the case of Pramod K. Shah dated 18-12-2006 were considered. Both these cited judgments are directly on the point, wherein the Hon ble High Court of Bombay has observed as under :- 5. To say the least, the learned Additional Sessions Judge has committed a grave error in not following the binding pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 price of any excisable goods under sub-section (4) of Section 4A of the Act, shall be determined in accordance with these rules. RULE 4. Where a manufacturer r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder 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 appellant to discharge the service tax liability as service receiver, on the face of the fact that notification under Section 68(2) of the Finance Act, 1994, was issued by the Central Government only on 31-12-2004. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he retail sale price of such goods : (ii) if the retail sale price cannot be ascertained in terms of clause (i), the retail sale price of such goods shall be ascertained by conducting the enquiries in the retail market where such goods have normally been sold at or about the same time of the removal of such goods from the place of manufacture : Provided that if more than one retail sale price is ascertained under clause (i) or clause (ii), then, the highest of the retail sale price, so ascertained, shall be taken as the retail sale price of all such goods. Explanation. - For the purposes of this rule, when retail sale price is required to be ascertained based on market inquiries, the said inquiries shall be carried out on sample basis. 5. Where a manufacturer alters or tampers the retail sale price declared on the package of goods after their removal from the place of manufacture, resulting into increase in the retail sale price, then such increased retail sale price shall be taken as the retail sale price of all goods removed during a period of one month before and after the date of removal of such goods : Provided that where the manufacturer alters or tamp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this Tribunal further observed that : 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 per the provisions of Standards of Weights and Measures Act, 1976 and Rules made thereunder. It is undisputed that in the months of December, 2001 and January, 2002, the appellants filed monthly returns indicating the assessable value after availing the abatement in accordance to the notification issued under the said Section i.e. 65% of the MRP. There is also no dispute that the MRP which was declared on the goods cleared during the relevant period was either obliterated or scored out. It can be seen from the above reproduced Section 4A that sub-section (4) was introduced by the Legislature w.e.f. 1-3-2008. It is also to be noted that the recalculation or re-quantification of an amount received in excess of the MRP declared and collected from the customers has to be done in a prescribed manner. The provisions of MRP Valuation Rules under sub-section (4) of Section 4A was introduced w.e.f. 1-3-2008 wherein the Central Government prescribed a procedure ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eights and Measures Act, 1976 (60 of 1976) or rules made thereunder or any other law for the time being in force; or (c) by declaring the retail sale price but obliterates the same after their removal from the place of manufacture, then, the retail sale price of such goods shall be ascertained in the following manner, namely :- (i) if the manufacturer has manufactured and removed identical goods, within a period of one month, before or after removal of such goods, by declaring the retail sale price, then, the said declared retail sale price shall be taken as the retail sale price of such goods : (ii) if the retail sale price cannot be ascertained in terms of clause (i), the retail sale price of such goods shall be ascertained by conducting the enquiries in the retail market where such goods have normally been sold at or about the same time of the removal of such goods from the place of manufacture : Provided that if more than one retail sale price is ascertained under clause (i) or clause (ii), then, the highest of the retail sale price, so ascertained, shall be taken as the retail sale price of all such goods . On plain reading of the said provisions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ain the price on which they are giving discount to their dealers and these dealers further passed on the discount to the buyers. In that situation, unless and until it is ascertained at which price the final goods were sold in the retail market the retail sale price cannot be ascertained. In the absence of fact that at which price the goods were finally sold in retail, the retail sale price on mere presumption that the retailer might have sold the goods on the basis of list price is not the conclusive evidence to ascertain the MRP. As the Revenue has failed to produce the evidence of retail sale price, therefore, the value adopted by Revenue as retail sale price is not sustainable. 18. Accordingly, the demands confirmed in the impugned order are not sustainable for the period post-1-3-2008. We, further find that the appellant has discharged their duty liability as per Section 4 and the invoices issued by M/s. Popular Electricals which as per the show cause notice is retail sale invoice in that case the retail sale price is the Discounted Sale Price + VAT. If the said price is adopted as retail price and after allowing abatement thereon at the rate of 40% as per the Rules, the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lowing 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. Explanation 1. - For the purposes of this section, retail sale price means the maximum price at which the excisable goods in packaged form may be sold to the ultimate consumer and includes all taxes, local or otherwise, freight, transport charges, commission payable to dealers, and all charges towards advertisement, delivery, packing, forwarding and the like, as the case may be. Explanation 2. - Where on any excisable goods more than one retail sale price is declared, the maximum of such retail sale price shall be deemed to be the retail sale price for the purposes of this sections . 23.2 As Central Excise Act as also Central Excise Rules and Notifications issued thereunder elaborately deals about the officers of Central Excise, their geographical jurisdiction, functional competency in different items of work including assessment of Excise duty, power of adjudications, no new machinery was required to be provided for implementation/enforcement of Section 4A introduced in 1997. Implementation of Section 4A was part of proces ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther 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 such price shall be deemed to be the retail sale price for the purposes of this section. Explanation 1. - For the purposes of this section, retail sale price means the maximum price at which the excisable goods in packaged form may be sold to the ultimate consumer and includes all taxes, local or otherwise, freight, transport charges, commission payable to dealers, and all charges towards advertisement, delivery, packing, forwarding and the like and the price is the sole consideration for such sale : Provided that in case the provisions of the Act, rules or other law as referred to in sub-section (1) require to declare 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 packa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shall be ascertained in the prescribed manner, which was not prescribed during this period, whether assessing officer can ignore the charging Section 4A(2) or adopt a reasonable/best judgment method (which was being adopted before 14th May, 2003). In our considered view there is no bar in adopting a reasonable/best judgment method to make the law as stipulated in Section 4A(2) operational. All that the notified Rules did was to provide guidelines to the assessing officer. Revenue during the argument have quoted the Hon ble Supreme Court judgment in the case of Mahim Patram Private Ltd. v. Union of India - 2007 (7) S.T.R. 110 (S.C.). In this case, the Central Sales Tax Act, 1956 did not provide any rule for determination of turnover in the case of transfer of property in goods involved in execution of works contract. It was argued before the Hon ble Supreme Court that non-framing of rule means Central Sales Tax is not leviable. In that context Hon ble Supreme Court observed as : 23. Sales tax is an indirect tax. It is leviable on transfer of goods. It is, however, well-settled that while construing a taxing status one has to look merely at what is clearly said. [See speech of Vi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the procedure for its calculation are to be construed by ordinary rule of construction. Whereas a liability has been imposed on a dealer by the charging section, it is well-settled that the Court would construe the statute in such a manner so as to make the machinery workable . In view of above judgment of Hon ble Supreme Court as also in our considered view during the period 14th May, 2003 when law stipulated prescribing Rules for determining MRP in specified situations to 1st March 2008, when Central Excise (Determination of Retail Sale Price of Excisable Goods) Rules, 2008 came into force, Retail Sale Price can be determined based upon the reasonable/best judgment of the assessing officer, consistent with the provisions of Section 4A. There can be no prohibition to the assessing officer to keep in mind the Rules notified on 1-3-2008 if assessment is being done after 1-3-2008 and is for period prior to 1-3-2008. 23.7 It may not be out of place to mention that even in the Rules, Rule 6 states as under : 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 pri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ternit Everest Ltd. v. UOI reported in 1997 (89) E.L.T. 28 (Mad.). In the said case, issue was relating to administration of Section 11D, which provides for recovery of any amount collected as duty, even though said duty was not chargeable/leviable under the law. Since the issue pertained to recovery of certain sums which was legally not excise duty, Hon ble High Court while upholding the constitutional validity of Section 11D, held that machinery provisions are required to implement the same. Nobody has brought to the notice of Tribunal in any of these cases, Hon ble Supreme Court s observation in the case of Mahim Patram Private Ltd. (supra). In situation under consideration, law was available, in certain situations assessment were based upon a reasonable/best judgment consistent with Section 4A, law was amended and stipulated prescribing the manner of ascertainment in certain situations, the same was prescribed with certain time leg, in the intervening period what is to be done whether to follow the practise of best judgment or not ascertain the MRP and make Section 4A(2) as also the whole of Excise Act redundant. Thus in our considered view demands for period prior to 1-3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as per Section 4 of the Central Excise Act, 1944 and is the transaction value between manufacturer and his customer. However for certain notified goods, under Section 4A(1) of the said Act, value for the purpose of excise duty is determined with reference to retail sale price. Sub-section (2) of Section 4A specifically states that in respect of such notified goods value has to be determined in accordance with Section 4A alone. For excisable goods covered under Section 4A, value is not the transaction value between manufacturer and his customer but is equal to the retail sale price minus the abatement. Abatement is expected to take care of excise duty, VAT, other taxes, profit of various persons in supply chain, freight, etc. Here, again, retailer is not bound to sell the goods on MRP/RSP alone but can grant discounts on such MRP/RSP. However retailer cannot charge more than MRP/RSP. Thus MRP/RSP for excise purpose in the highest price that can be legally changed by a retailer. In our considered views, list price and printed MRP/RSP serves the same purpose and are therefore exactly same. MRP/RSP is printed on the package of a product and the list price is printed on sheet of paper. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ls to stockist and then to retailer. At every level, discount decreases. However, price indicated in the price list forms the basis of all such transactions/discount. This is evident from the invoices produced by Revenue. Each invoice indicates the list price and thereafter discount, VAT, etc. Retailer is expected to sell at the rate prescribed in list price (plus VAT/local taxes). Retailer is expected not to charge more than list price (plus VAT local taxes) but may grant some discount to purchaser (based upon the bargaining abilities). We note that invoices produced by Revenue are from stockist to retailers and not from retailer to consumer. We note that sub-clause (ii) of Rule 4 does not stipulate only collecting invoices, noting the sale prices and then taking highest of these. A plain reading of the Rule makes it clear that enquiries are to be conducted and purpose of enquiries is to reach as near to MRP as possible. We also note that as per the proviso to Rule 4 if more than one retail sale price is ascertained, the highest of the retail sale price so ascertained, shall be taken as the retail sale price of all such goods. Obviously, the purpose of this proviso is that abate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment in the meantime. The conduct of the appellants in approaching authorities other than excise authorities for excise duty only support wilful intention to somehow evade excise duty. In view of this as also other facts enumerated in the impugned orders, we hold that extended period of limitation is correctly invoked. Sd/- (P.K. Jain) Member (Technical) As there is a difference of opinion between the Members of the Bench, the matter may be placed before the Hon ble President to refer it to a 3rd Member to decide the following : DIFFERENCE OF OPINION (1) The demands for the period prior to 1-3-2008 are not sustainable as there was no machinery provisions available to determine MRP of the product. OR The demands for the period prior to 1-3-2008 are sustainable as MRP of the product can be determined by the assessing officer using reasonable/best judgment based upon material available and consistent with principles and provisions of Section 4A of the Central Excise Act, 1944. (2) The list price cannot be adopted as MRP as per Rule 4(a)(ii) of Central Excise (Determination of Retail Sale Price of Excisable Goods) Rules, 2008. OR The list price or ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts themselves for subsequent period. (3) Demands for extended period is not sustainable in view of reasons enumerated in para 19 above. OR Demand for extended period is sustainable in view of the conduct of appellants as enumerated in para 26 above including the reason recorded in impugned orders. 27. The matter was heard on 6-11-2013, 7-11-2013, 8-11-2013, 18-11-2013 and finally on 25-11-2013. The arguments on behalf of the appellants made by the counsels can be summarized as follows : 27.1 The Hon ble Member (Technical) has concluded that for the period prior to 1-3-2008, the assessing officer was empowered to use his best judgment even if the manufacturer had not declared the MRP. It is contended that best judgment-assessment cannot be made without conferring the powers upon the assessing officer either in the Act or in the Rules. It is not in dispute that even though the powers to frame the rules for determination of MRP in a case where MRP is not declared by the manufacturer and the product is notified under Section 4A and MRP was required to be declared under the Packaged Commodities Rules, 1997 (PCR in short), the rules were actually notified only effective ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case of Mahim Patram Private Ltd. v. Union of India - 2007 (7) S.T.R. 110 (S.C.) to conclude that the Revenue could adopt any reasonable measure to determine the MRP in the absence of specific rules prescribed for determination of MRP is incorrect inasmuch as the facts of the said case were different from those involved in the present appeals. In that case, the Hon ble Apex Court was required to consider whether a specific rule was required to ascertain the value of the goods transferred in execution of the inter-State works contract; the assessee took a contention in the absence of any rule framed by the Union of India prescribing the manner of determination of the value of the goods transferred in execution of the inter-State works contract, no work contract tax can be recovered. The Hon ble Apex Court held that, in view of the method prescribed for such levy for sales within the State under the Rules framed by the State Government for that purpose, the same can be applied in respect of inter-State sales also so long as the method prescribed in the State laws are not inconsistent with the provisions of the Central Sales Tax Act. In the present case, there is no rule availabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the appellant across India is without any basis. Similarly, the addition of 5.5% octroi on all sales for determination of RSP is also incorrect inasmuch as there is no evidence to show that 5.5% octroi is applicable throughout India. Even if it is held that the provisions of the Standards of Weights and Measures Act, 1976 and the rules framed thereunder are held to be applicable to the appellants products, the appellants were required to declare retail sale price inclusive of all taxes and there was no provision requiring the appellants to declare a retail sale price exclusive of taxes. It is also argued that a price list is no more than a general statement as held by the Hon ble Apex Court in the case of Eicher Tractors Ltd. v. Commissioner of Customs, Mumbai - 2000 (122) E.L.T. 321. It is further argued that even though the appellant s products were notified under Section 4A, the appellant had filed a writ petition before the Hon ble Bombay High Court and the Bombay High Court vide order dated 12-3-2007 allowed the appellants to clear the goods provisionally on payment of duty under Section 4 of the Act and giving a bond and bank guarantee for the notional MRP agreed to, by w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of Subhash Arjandas Kataria [2012 (275) E.L.T. 289] a Division Bench of the Supreme Court has directed the Registry to place the matter before a Larger Bench and the matter is still pending in respect of goods which are not required to be packed for retail sale. In these circumstances, the question of invoking the extended period of time would not arise at all. Reliance is also placed on the decision of this Tribunal in the case of Control Switchgears Contractors v. Commissioner of Central Excise, Noida [2005 (183) E.L.T. 95] wherein this Tribunal held that the exemption under Rule 34 is available to the contactors, overload relays, electrical timers and accessories, etc. and the appeal filed by the Revenue against the said decision was dismissed by the Apex Court in 2007. Accordingly, in the case of one of the appellants, namely, Schneider Electricals India Pvt. Ltd., the adjudicating authority has dropped the demand for the extended period in respect of identical goods and did not impose any penalty. Therefore, the other appellants who are similarly situated and who manufacture identical goods (as Schneider Electricals India Pvt. Ltd.) are also entitled for similar reliefs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n be read in such a manner that would render that part of the statute redundant/otiose. 28.2 It is also settled position of law that statute should be interpreted in such a manner so as to avoid abuse of law and also not promote evasion. This Tribunal in the case of Commissioner of Customs v. Printer House Ltd. - 1998 (104) E.L.T. 632 had inter alia held that : there is another principle of law which in our view would be applicable for construing legal provisions in a fiscal enactments. It is that provisions of law should be construed in a manner that does not promote evasion of tax . 28.3 Prior to introduction of sub-section (4) to Section 4A, the Central Excise officers could, by virtue of inherent powers, determine the RSP adopting any just and reasonable means so as to frustrate the motive of gross defaulters to by-pass/defy the law. In Assistant Collector of Central Excise v. National Tobacco Company of India Ltd. - AIR 1972 SC 2563 = 1978 (2) E.L.T. J416 (S.C.), the Hon ble Apex Court had held that the established rule of construction is that a power to do something essential for the proper and effectual performance of the work which the statute has in contemplatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is textually inadmissible. As stated by Lord Denning the rule that an act of Parliament is not be given retrospective effect applies only to statutes which affect vested rights. It does not apply to statutes which only alter the form of procedure or the admissibility of evidence or the effect which the courts give to evidences is the new act affects matter is of procedure only, then, prima facie it applies to all actions pending as well as future . 28.7 Similarly, in Tirumalai Chemicals - 2011 (268) E.L.T. 296 the Hon ble Apex Court held that procedural law is retrospective meaning thereby that it would apply even to acts or transactions under the repealed Act. It was further held that every litigant has a vested right in substantive law but no such rights exist in procedural law. The decision of the Hon ble Apex Court in ITW Signode India Ltd. v. Collector of Central Excise - 2003 (158) E.L.T. 403 (S.C.) also confirms this position. 28.8 As regards the applicability of extended period of time, in the matters of L T Ltd. and Siemens Ltd. and their respective job workers, it is the contention of the Revenue that the appellants were operating under self-assessment system and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 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. Explanation 1. - For the purposes of this section, retail sale price means the maximum price at which the excisable goods in packaged form may be sold to the ultimate consumer and includes all taxes, local or otherwise, freight, transport charges, commission payable to dealers, and all charges towards advertisement, delivery, packing, forwarding and the like, as the case may be. Explanation 2. - Where on any excisable goods more than one retail sale price is declared, the maximum of such retail sale price shall be deemed to be the retail sale price for the purposes of this section 29.1 There is no dispute between the Member (Judicial) and the Member (Technical) with regard to the question as to whether the provisions of Section 4A applies to the goods manufactured by the ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der Section 4A. Thus, there is a contradiction in the findings and conclusions drawn by the learned Member (Judicial) that prior to 1-3-2008 the goods were liable to be assessed for excise duty purposes under Section 4 of the Act and not under Section 4A. 29.2 The next question for consideration is whether for the period prior to 1-3-2008, the maximum retail price of the impugned goods can be determined by the assessing officer using reasonable/best judgment method based on the materials available and consistent with the provisions of Section 4A of the Central Excise Act, 1944, in the absence of a machinery provision available for determination of the MRP of the product. 29.2.1 There is no dispute that the Central Government acquired the powers to ascertain in the prescribed manner the retail sale price of such goods and the retail sale price so ascertained shall be deemed to be retail sale price for the purpose of the Section vide Finance Act, 2003 which substituted sub-section (4) of Section 4A. The rules were notified only w.e.f. 1-3-2008. The question is, prior to 1-3-2008 whether the provisions of the said Rules could be applied for determination of RSP using the best ju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goods from the place of manufacture : Provided that if more than one retail sale price is ascertained under clause (i) or clause (ii), then, the highest of the retail sale price, so ascertained, shall be taken as the retail sale price of all such goods. Explanation. - For the purposes of this rule, when retail sale price is required to be ascertained based on market inquiries, the said inquiries shall be carried out on sample basis. RULE 5. Where a manufacturer alters or tampers the retail sale price declared on the package of goods after their removal from the place of manufacture, resulting into increase in the retail sale price, then such increased retail sale price shall be taken as the retail sale price of all goods removed during a period of one month before and after the date of removal of such goods : Provided that where the manufacturer alters or tampers the declared retail sale price resulting into more than one retail sale price available 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 re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esaid. In other words, it provides for ascertainment of RSP by using reasonable and fair means consistent with the provisions. 29.2.4 RSP is defined in Explanation - I to Section 4A. Thus, what RSP is clearly indicated in the Act and what the Rules purport to do is, how to ascertain the RSP. In other words, the ascertainment of RSP is purely procedural in nature. 29.2.5 A similar issue came up for consideration before the Hon ble Apex Court in the case of C.W.T v. Sharvan Kumar Swarup Sons - 1994 SCC (6) 623. The question before the Apex Court was whether Rule 1BB of the Wealth-tax Rules, 1957 is a provision which affects and alters the substantive rights or is merely procedural and whether the Rules is attracted to all the proceedings pending at its enactment. The said Rule 1BB was concerned with mode of valuation of a house property wholly or mainly used for residential purposes, for the purposes of ascertaining the net wealth under the Wealth-tax Act, 1957. The Hon ble Apex Court in that context held as follows : 10. The basis of distinction between statutes affecting rights and those affecting merely procedure is well-recognised. Dixon, C.J. in Maxwell v. Murphy dr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or criminal. All the residue is substantive law, and relates, not to the process of litigation, but to its purposes and subject matter. Substantive law is concerned with the ends which the administration of justice seeks. Procedural law deals with the means and instruments by which those ends are to be attained. The latter regulates the conduct and relations of courts and litigants in respect of the litigation itself; the former determines their conduct and relations in respect of the matters litigated. ... What facts constitute a wrong is determined by the substantive law; what facts constitute proof of a wrong is a question of procedure. ... So far as the administration of justice is concerned with the application of remedies to violated rights, we may say that the substantive law defines the remedy and the right, while the law of procedure defines the modes and conditions of the application of the one to the other. 29.2.6 The Hon ble Apex Court further held that : a distinction has to be made by Court while interpreting the provisions of a taxing statute between charging provisions which impose the charge to tax and machinery provisions which provide the mac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as whether APMC should have levied market cess when the levy was subject to the maximum to be provided for in the Rules. However, the rules did not provide for the maximum and, therefore, it was held that the levy was ultra vires. There again, the question was the rate of cess and what should be the maximum rate. In the absence of a maximum rate prescribed under the rules, it was held that the levy was ultra vires. Similarly, in the case of Dhrangadhra Chemical Works Ltd. (supra), the issue was whether the Municipality could levy enhanced octroi. The law in that case mandated that there should be a resolution and rules specifying the class or class of persons who is liable to pay tax and the amount of rate at which the tax should be collected. However, no rules were framed and hence it was held that the levy was ultra vires. In other words, in this case also the person liable to pay tax and the rate of tax was the issue. Since these elements are core of the tax system and are substantive in nature, the levy was held to be illegal in the absence of proper prescription. That is not the case before me. 29.2.10 In the present case, the charging section provides for the levy, the rat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the absence of specific rules providing for mutilation of the goods imported, whether the Customs can direct mutilation. The Hon ble High Court of Gujarat held as follows : Section 24 of the Customs Act provides the clue thereto. Under that provision the Central Government is empowered to make rules for permitting at the request of the owner mutilation of imported goods so as to render them unfit for use for a purpose other than the one for which they are imported. This is an enabling provision which indicates that Parliament had conceived of a situation where further mutilation on import may be necessary to render the material unfit for use for a purpose other than the one for which the same was imported. In the absence of rules and till such rules are framed, the spirit underlying this provision can be invoked by directing the customs authorities to permit further mutilation on import before clearance. 29.2.13 If we apply the ratio of this decision to the facts of the present case. Section 4A(4) enables the Government to frame rules for ascertaining the RSP. Section 4A(2) deems the value for the purpose of assessment of excise duty as the retail sale price declared on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... act that they operate on conditions already existing. Rules 2008 is a curative provision to deal with a situation where the RSP is not declared or tampered with. Therefore, it is retrospective in nature. 29.2.14 In the light of these decisions, there is absolutely no doubt that the MRP of the product can be ascertained by the assessing officer using reasonable/best judgment means based on the material available and consistent with the principles and the provisions of Section 4A of the Central Excise Act, 1944 even if rules for ascertainment of the same were not framed earlier and came about later. I answer the reference accordingly. 29.3 The next issue for consideration is whether the list price can be adopted for determination of MRP or not? 29.3.1 The contention raised by the appellant is that the list price is only a quotation and, therefore, it cannot be considered as price at which the goods are sold and reliance is placed on the decision of the Hon ble Apex Court in the case of Eicher Tractors Ltd. v. Commissioner of Customs - 2000 (122) E.L.T. 321 (S.C.) wherein it was held that : A price list is really no more than a general quotation. It does not preclude ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of the appellant is that the list price is only indicative and it cannot be taken as basis for determination of RSP. This contention is not acceptable for the following reason. The stockists who were examined by the investigating agency and situated at different places have clearly admitted that the list price is the maximum price at which the impugned goods can be sold by the stockists or by the retailer and they can charge only a price below the list price. However, they can charge sales tax and octroi, etc., as applicable. These statements of the stockists have not been rebutted by the appellants in anywhere. When the officials of the appellant-firms were shown the statement given by the stockists and asked to comment, they refused to comment on the matter. If they were really of the view that the list price was not the maximum price at which the goods could be sold, they should have stated so before the investigating authorities and their silence in this regard is clearly an admission that the list price circulated by the appellant-manufacturers in this case, is the maximum price exclusive of taxes. Thus the understanding of the appellants and their stockists was that the li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trology has done in 2007. The said decision of the Director, Legal Metrology was challenged unsuccessfully by the appellants before the Hon ble Bombay High Court and the Hon ble Bombay High Court upheld the decision of the Director, Legal Metrology and held on the products manufactured by the appellants were covered under the Standards of Weights and Measures Act and the Packaged Commodities Rules and the appellants were required to declare RSP on the packages. Thus, the appellants were fully aware of the legal requirements. In spite of such knowledge, the appellant chose not to comply with the law in complete defiance of the law. There was no reason for the appellant to entertain any reasonable belief that they were not required to declare the RSP on the packages. The question is when an appellant deliberately defies a statutory requirement, can they be allowed to get away with it and obtain the benefit under some other law. 29.4.1 A similar issue came up for consideration before the Hon ble Apex Court in the case of Maddi Venkataraman and Co. (P) Ltd. v. Commissioner of Income Tax - 1998 (229) ITR 534 (SC). In that case the appellant committed violations of Foreign Exchange Re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tral Excise Act by holding that the appellant was not liable to discharge excise duty under Section 4A of the Central Excise Act. In the present case, a deliberate contravention of the Standards of Weights and Measures Act in utter disregard to the law was also a contravention under the provisions of Central Excise Act and these contraventions had been committed by the appellant with an intention to evade payment of legitimate Central Excise duty. In these circumstances, the invocation of extended period of time is completely justified and, therefore, the main demands made invoking the extended period of time is clearly sustainable. 29.4.4 The appellants also resorted to subterfuge by making misdeclarations on the packages that they are meant for industrial consumers and not for retail sale. There was no exemption under Rule 34 of the PCR from declaration of MRP even if the goods were meant for industrial or institutional customers, if they were sold by numbers and displayed for sale by the stockists and retailers. The appellants agreements with the stockists required the latter to display these goods for sale and the stockists have also confirmed this fact in their statements ..... X X X X Extracts X X X X X X X X Extracts X X X X
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