TMI Blog2015 (10) TMI 1570X X X X Extracts X X X X X X X X Extracts X X X X ..... he MRP on the sachets or on the multi piece packages or on both under the aforesaid Acts and the Rules made thereunder. - The method of valuation under Sec.4 of CEA,1944 and consequently computation of the demand adopted by the Ld.Commissioner, in the respective appeals, in our opinion is erroneous. It is an admitted fact that the appellant removed the goods from their factory to the Depot from where the same were sold. We find in Appeal No.( E/70200/13), the adjudicating authority has adopted average selling price whereas in appeal No. (E/76111/14), the adjudicating authority has adopted the abated value i.e. after deducting 35% from the declared MRP as the basis for determination of value under Section 4 of CEA, 1944. In our opinion, both the methods are incorrect in as much as since the goods were not sold from the factory but sold from the depots, therefore, Section 4(1)(b)read with Rule 7 of the Central Excise Valuation Rules, 2000 are relevant for determination of the assessable value. - Impugned Orders are set aside - Matter remanded back - Decided in favour of assessee. - Excise Appeal Nos. E/179 to 182/12, E/70200/13 & E/76111/2014 - ORDER NO.FO/A/75408-75413/15 - Dated:- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n-Appeal passed by the Ld. Commissioner (Appeals), the facts relate to sanctioning of the refund by the jurisdictional authorities for the period 2009-10 and July 2010 to September, 2010. The appellant filed refund claims on month to month basis in terms of Notification No. 71/03-CE dated 09/9/2003 assessing their goods under Provision of Section 4A of CEA, 1944 and the refund claims were sanctioned to them till March, 2009. However, for the aforesaid period, even though the refunds were initially sanctioned, but the Revenue filed review application before the Ld. Commissioner (Appeals), who has decided the issue in favour of the Revenue, resulting into the present appeals by the Appellant. 5. Ld. Advocate Shri Ravi Raghavan for the Appellant assailing the impugned Order has submitted that the appellant had cleared Powdered Hair Dye(PHD) from the factory in mono cartons duly affixed with the applicable MRP which was intended for retail sale to the consumers in such packing. It is his contention that the condition in which the goods were packed and cleared from the factory and intended to be sold as 'retail pack', ought to be assessed in that form and not in the form of s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inting MRP and other declaration prescribed under these Rules. He has further submitted that the intention to sell the mono cartons/packs in retail to ultimate consumer is evident/manifest from the declaration made on the mono cartons/packages and the manner in which the carton is prepared, hence, the provisions of PC Rules,1977 or PC Rules,2011 are applicable to the mono Carton/packs containing the sachets. In support he has referred to the decision of Larger Bench of the Tribunal in the case of Roys Industries Ltd. Vs. CCE, Hyderanbad-2010 (259) ELT 387 (T-LB) and CCE, Vapi Vs. Kraftech Products-2008 (224) ELT 504 (S.C.). 8. He has further submitted that non-compliance of the mandatory requirements of declaration of MRP on the mono cartons/pack under the provisions of PC Rules,1977 or PC Rules,2011 would result in penal action. It is his submission that at the time of clearance from the factory, the mono carton contains 6/8 sachets of PHD weighing 03 grams each, hence the total weight of PHD in the mono cartoon/packs was 18 grams/ 24 grams respectively. Since the total weight of PHD in the mono pack was more than 10 grams, hence, it would fall outside the exclusion clause cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... computation of is wrong and arbitrary. If the value is computed as per Se.4(1)(b) read with Central Excise Valuation Rules, 2000, the out come would be that the Appellant had paid excess duty of ₹ 9.33 lakhs. Further, he has submitted on re-computation of the demand during the course of hearing of their Stay application, the department has arrived at the liability at ₹ 2,55,869/- by including the secondary freight i.e. freight charges from the depots to the customer's premises. It is his submission that secondary freight from the depots to the customer's premises cannot be included in the assessable value as the place of removal was the depot not at the customer's premises. In support, he has referred to the judgment of the Hon'ble Supreme Court in the case of Escorts JCB Ltd. Vs. CCE, Delhi-II reported in 2002 (146) ELT 31 (SC) and Prabhat Zarda Factory Ltd. Vs. CCE reported in 2002 (146) ELT 497 (SC) and CCE, Aurangabad Vs. M/s. Roofit Industries Ltd. reported in 2015 (319) ELT 221 (SC). 11. In relation to Appeal No. (E/179182/2012), the Ld. Advocate has submitted that the value in those cases ought to have been arrived at in terms of Section 4 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eclude the possibility of selling individual sachets in retail to the consumer. Therefore, the contention of the appellant that their intention was to sell the mono pack only and not the individual sachets, is not borne out from the mode/style of packing of the sachets; and also in absence of any such warning on the pack to the effect that the said sachets are not to be sold in retail, the said argument is not acceptable. 15. Further, he has submitted that by virtue of Notification No. 425E dated 17/07/2006 issued under The Standards of Weights and Measures(Packaged Commodities)Rules,1977 the definition of 'multiple piece packing' under Rule 2(j) has been deleted. This has resulted in removing multiple piece packing from the purview of PC Rules,1977 w.e.f. 17/07/2006 and there was no requirement of affixing MRP on multiple piece packages. The said Notification also amended Rule 34(b) of PC Rules,1977 and Rule 26(a) of PC Rules,2011. Thus, the package weighing less than 10 grams had been exempted from the provisions of the said Rules. In view of the said exemption, there is no legal requirement of affixing the MRP on individual sachet of PHD as each sachet weighed 3 grams ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the MRP on the packages of the goods under the Provisions of The Standards and Measures Act, 1976 or The Legal Metrology Act,2009 and the Rules made there under. It is his submission that if there is no statutory requirement under the said provisions to declare the retail sale price on the Mono packs, then assessment under Section 4A of CEA, 1944 will not be attracted. Further, he has referred to a letter F. No. 341/64/97-TRU dated 11/08/1997 issued by the Board issued in the context of certain cases, where the printing of MRP on packages were made even when there was no statutory requirement to do so under the SWMR , 1976. It was clarified that in such cases, duty would be assessed under Section 4 of CEA, 1944 and not under Section 4A. He has submitted that in view of the aforesaid circulars, it is clear that by affixing MRP of individual sachets and on multiple packages on their own, when there is no legal requirement to do so, the goods cannot be subjected to assessment under Section 4A of CEA, 1944. In support, he has referred to the following case laws: (i) Central Arecanut and Coco Marketing and Processing Co-Op. Ltd. Vs. CCE, Bangalore 2008 (226) ELT (364) (Tri-Chennai); (i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, in the mono pack, is weighing less than ten grams, hence, fall under the exempted category under Rule 34(b) of PC Rules,1977 or under Rule 26(a) of PC Rules, 2011, and accordingly, no MRP is required to be affixed on the same. Therefore, the PHD cleared from the factory is liable for assessment under Section 4 of CEA, 1944. 24. Before considering the rival arguments, it is necessary to refer to the relevant provision of Section 4A of CEA,1944 which reads as: SECTION [4A. Valuation of excisable goods with reference to retail sale price. - (1) The Central Government may, by notification in the Official Gazette, specify any goods, in relation to which it is required, under the provisions of the [Legal Metrology Act, 2009 (1 of 2010)] or the rules made thereunder or under any other law for the time being in force, to declare on the package thereof the retail sale price of such goods, to which the provisions of sub-section (2) shall apply. (2) Where the goods specified under sub-section (1) are excisable goods and are chargeable to duty of excise with reference to value, then, notwithstanding anything contained in section 4, such value shall be deemed to be the retail sal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tail sale prices are declared on different packages for the sale of any excisable goods in packaged form in different areas, each such retail sale price shall be the retail sale price for the purposes of valuation of the excisable goods intended to be sold in the area to which the retail sale price relates.] 25. The definition of 'retail package', 'multi piece package', 'wholesale package' defined under The Standards of Weights and Measures (Packaged Commodities) Rules,1977, relevant for the present purpose reads as below: -2(j) multi-piece package means a package containing two or more individual packaged or labelled pieces of the same commodities of identical quantity, intended for retail sale, either in individual pieces or the package as a whole; illustration: A package containing 5 toilet soap cakes net weight 20g. each, total net weight 100g is a multi-piece package. 2(p) retail package means a package containing any commodity which is produced, distributed, displayed, delivered or stored for sale through retail sales, agencies or other instrumentalities for consumption by an individual or a group of individuals. 2(x) Whole ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (the clarification dt. 11/08/1997 did not, however, specifically mention whether the disputed goods were notified u/s. 4A or not and whether it covered only non-notified goods). 6. It is, therefore, clarified that, in respect of all goods (whether notified u/s. 4A or not) which are not statutorily required to print/declare the retail sale price on the packages under the provisions of the Standards of Weight Measures Act, 1976, or the rules made thereunder or any other law for the time being in force, valuation will be done u/s. 4 of the C.E. Act, 1944 [or under Section 3(2) of the Central Excise Act, 1944, if tariff values have been fixed for the commodity]. Thus, there could be instances where the same notified commodity would be partly assessed on the basis of MRP u/s. 4A and partly on the basis of normal price (prior to 1-7-2000) or transaction value (from 1-7-2000), u/s. 4 of the C.E. Act, 1944. 29. The aforesaid clarification has been endorsed by the Hon'ble Supreme Court in the case of Jayanti Food Processor Pvt. Ltd. Vs. Commissioner of Central Excise, Rajastan 2007 (215) ELT 327(SC), where in their Lordships observed as: 27. The Tribunal in Para 8 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ose of consumption. Rebutting the said argument of the Appellant, the Revenue pleaded that their intention was to sell the sachets of 3 grams and not the mono pack containing 6/8 sachets of 03 grams each as there is no warning of any sort printed on the mono pack prohibiting the retail sale of the sachets. Further, taking shelter of an example, the Revenue pleaded that Amul Cheese cubes are sold in mono pack consisting of ten/fifteen cubes which are simply packed with wrappers but no MRP is printed on the wrapper-packing of said cheese cube, but on the mono pack; this indicates that the mono pack is meant for retail sale. He has contended that the claim of the Appellant to sell mono pack in retail in the circumstances, is unacceptable. 31. At the cost of repetition, it is to mention that the entire dispute rests on the question whether the appellant is required to print/affix MRP on sachets and/or on the mono pack containing 6/8 sachets. It cannot be ruled out that both sachets and mono pack are capable of being sold in retail, a situation fairly accepted by the Appellant. But, the Appellant insisted on their plea that it was not their intention to sale the sachets in retail but ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd the respective Rules made thereunder. 34. We are of the view that as per the opinion of the Legal Metrology Department on the requirement of affixing the MRP on the sachets and/or on the mono packs containing the manufactured goods viz. PHD, the same would be subjected to assessment either under Section 4 or Sec. 4A of CEA,1944, accordingly. 35. However, we find force in the alternative submission advanced by the Ld. Adv. for the Appellant. The method of valuation under Sec.4 of CEA,1944 and consequently computation of the demand adopted by the Ld.Commissioner, in the respective appeals, in our opinion is erroneous. It is an admitted fact that the appellant removed the goods from their factory to the Depot from where the same were sold. We find in Appeal No.( E/70200/13), the adjudicating authority has adopted average selling price whereas in appeal No. (E/76111/14), the adjudicating authority has adopted the abated value i.e. after deducting 35% from the declared MRP as the basis for determination of value under Section 4 of CEA, 1944. In our opinion, both the methods are incorrect in as much as since the goods were not sold from the factory but sold from the depots, ther ..... X X X X Extracts X X X X X X X X Extracts X X X X
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