TMI Blog2015 (10) TMI 1026X X X X Extracts X X X X X X X X Extracts X X X X ..... alorem rate of duty, was determined on the basis of normal whole sale price at which such goods are sold; however, after 01.7. 2000, transaction value has become the basis to ascertain the assessable value Manufactured lubricating oils has been notified under The Standards of Weights and Measures Act read with relevant Rules, accordingly, the assessable value of the said goods are to be determined as per section 4A of Central Excise Act, 1944. It is not disputed at any stage that the goods manufactured by the appellant are subjected to assessment under section 4A of Central Excise Act, 1944. The only dispute relates to determination of the value of the quantity of lub. Oil contained in the packs and consequently the duty paid by the appellant. There is no dispute about the fixation of MRP on the bonus/promo pack and no objection has been raised by the department about the compliance of the requirement of the provisions of The Standards Weights and Measures Act and the Rules made thereunder. The Appellant is at liberty to ascertain its own MRP of the goods depending on the market conditions and required to affix the same on the packing, subject to the condition that in selecti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s bonus/promo pack cleared with the same MRP. Revenue issued show cause notices to the appellant alleging that since the additional quantity of lubricating oil cleared in the bonus/promo pack had not suffered duty, accordingly duty was recoverable on the said additional quantity of Lub. Oil cleared in the same pack. On adjudication, differential excise duty of ₹ 1,30,14,474/- had been confirmed and penalty of equal amount was imposed under Section 11AC of Central Excise Act, 1944, along with direction for recovery of interest under Section 11AB of Central Excise Act, 1944. Hence, the present appeal. 4. Shri D.Arvind, ld.C.A. for the appellant submits that during the relevant period their product was notified under The Standards Weights and Measures Act read with the Standards of Weights and Measures (Packaged Commodities) Rules, 1977 hence, they discharged excise duty, on the assessable value, as per Section 4A of Central Excise Act, 1944. He submits that during lean period, in addition to the quantity in a standard pack, they also include certain extra quantity, declaring the same MRP, on the packages, so as to capture the market. It is his submission that extra quantity ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... LT 20 (Tri.LB) is not applicable to the facts of the present case, inasmuch in that case the appellants are manufacturer of P P Medicines falling under chapter 3003 of CETA and were indicating the MRP on the packages in terms of the provisions contained in Drugs (Price Control) Order, 1955 (DPCO). The appellant cleared 25 boxes free along with 100 boxes and the boxes which are allowed free also contained the MRP printed on each box as the same were required to be printed as required under DPCO. It is his submission that in the present case the additional quantity are not cleared in separate packs affixed with MRP, therefore, the said judgement is not applicable to the facts of the present case. 6. Per contra, the ld.A.R. (Commissioner) for the Revenue submitted that the additional quantity cleared in the promo packs had not suffered duty, inasmuch as, when a comparison is made between the bonus/promo packs and the normal pack, even though at the same MRP printed on both, but, the price at which unit quantity of Lub. oil was made available to the customers, was different. It is his submission that therefore the MRP arrived at and affixed on the packages of bonus/promo pack is n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aking into consideration, its physical properties, namely, weight, volume, length, etc. or the value of the goods. The former one is described as specific rate of duty and the later one is as ad valorem rate of duty. Specific rate of duty is independent of the value, that is the price at which it could be sold; similarly, the value is independent of the physical characteristics of the goods i.e. its volume, weight, length etc.. Both methods are mutually exclusive. In the present case, the lubricating oils are subjected to ad valorem rate of duty. In other wards, it is the value of the goods which is relevant for determination of the quantum of duty applicable to the quantity of goods manufactured and cleared from the factory. 10. Prior to 01.7. 2000 the value of the goods chargeable to ad valorem rate of duty, was determined on the basis of normal whole sale price at which such goods are sold; however, after 01.7. 2000, transaction value has become the basis to ascertain the assessable value. The amended section 4 reads as: SECTION [4. Valuation of excisable goods for purposes of charging of duty of excise. - (1) Where under this Act, the duty of excise is chargeable on any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lared 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 package of any excisable goods more than one retail sale price is declared, the maximum of such retail sale prices shall be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lub. Oil contained in the said pack. 15. We are unable to persuade ourselves to accept any of the aforesaid reasoning. The first one is fallacious inasmuch as the ld. Commissioner has himself observed that the present goods are notified under section 4A and its assessable value is to be determined under Sec.4A and not under section 4 of the Central Excise Act, 1944; hence, the additional quantity or reduction in price from the declared MRP allowed by the Appellant to promote their business cannot be equated to the principle of law laid down by the Hon'ble Supreme Court in Bombay Tyres International's case(supra) on the inclusion or exclusion of certain expenditures in the assessable value, as the said principle was laid down in the context of Sec. 4 of CEA,1944. The second reasoning also devoid of merit in as much as in section 4A, it is laid down that if the MRP is not affixed as per provisions of The Standards of Weights and Measures Act, then the department would proceed to ascertain the correct MRP. In the present case, there is no dispute about the fixation of MRP on the bonus/promo pack and no objection has been raised by the department about the compliance of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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