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M/s Sterling Tools Ltd, Shri Atul Aggarwal, Director Versus Commissioner of Central Excise And Service Tax, Faridabad

2015 (10) TMI 1991 - CESTAT NEW DELHI

MRP based Valuation u/s 4A or transaction value u/s 4 - whether the goods supplied to the distributor in wholesale packages are liable to be assessed under section 4(A) of the Central Excise Act 1944 or not - Held that:- As per the definition of multi piece packages and the definition of wholesale packages, we find that sub clause 2(x) of the standard of Weight and Measures (Package Commodities) Rule 1977 is applicable to the facts of this case, as the fasteners are sold by the appellant to whol .....

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- Supreme Court). In these circumstances, we hold that appellant has correctly valued their goods sold to the wholesaler in wholesale packages and valued as per section 4 of the Central Excise Act 1944 i.e. transaction value - Decided in favour of assessee. - Appeal Nos. E/1960-1961/2011-EX(DB) - Final Order Nos. A/52747-52748/2015-EX(DB) - Dated:- 5-8-2015 - Ashok Jindal, Member (J) And B Ravichandran, Member (T) For the Appellants : Shri V Lakshmi Kumaran & Shri Amit Jain, Advs For the Re .....

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ection 4(A) of the Central Excise Act 1944. The period of dispute in this case is 01.06.2006 to 31.12.2008 and from 01.01.2009 to 31.09.2010. During the impugned period, the appellant company was clearing automobile parts in the following manner: a) Automobile manufacturers as original equipment parts in loose condition on which duty was being paid on transaction value under section 4 of the Central Excise Act 1944. b) Spare parts division of automobile manufactures in packings containing 1 to 1 .....

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a) & b) herein above. The only dispute with regard to the goods sold to the wholesale dealer in boxes of 100 pieces each on which duty was paid and transaction value as per section 4 of the Act. Therefore, the show cause notices were issued to the appellant by invoking extended period of limitation for the period 01.06.2006 to 31.12.2008 on 07.05.2010 and for the period Jan 2009 to October 2010 on 07.01.2011 to demand duty on the clearances made to the wholesale dealer to whom the goods were .....

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their goods as multi piece packaging which is beyond the show cause notices as there is no allegation as such in the show cause notice. He submits that the packing in which the appellant is clearing the goods are wholesale packing and no MRP is required to be declared and the valuation is to be done as per section 4 of the Act. He further submits that the Rules governing multi piece packing were omitted from the statute book w.e.f. 13.01.2007 vide Notification no. GSR/425 (E) dated 17.07.2006. .....

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orks Ltd. Vs. UOI 2000 (119) ELT 257 (SC) . 5. On merits, he submits that goods in question cannot be considered as multi piece packages as multi piece packages contemplates individually packed and labeled pieces of same commodity intended for retail sale. In fact, in the present case the nut, bolts, screws are not individually packed or labeled. On the contrary, they are packed in bulk in loose form in a polythene bag inside a carton containing 10 to 200 pieces. Individual pieces are sold to ul .....

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rement to affix MRP and the provision of section 4A are not applicable. To support this contention he relied on the decision of: a) Sarvotham Care Ltd.-2012 (286) ELT 357 (Tri-BLR) b) Swans Sweets Pvt. Ltd.-2006 (198) ELT 565 (Tri-Bombay) c) Central Arecanut & Cocoa Marketing & Processing Co-OP Ltd.-2008 (226) ELT 369 (Tri-Madras) d) Roy Industries-2006 (201) ELT 609 (Tri-Bang) e) Makson Confectionery Pvt Ltd. 2010 (259) ELT 5 (SC) f) Sampre Nutrition Ltd. Vs. CCB Hyderabad-2013 (290) EL .....

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ces based on the same is not sustainable. He further submits that the Central Excise (Determination of Retail Price of Excisable Goods) Rules came into force w.e.f. 01.03.2008 vide notification no. 13/2008-CE(NT). Prior to that, there was no method to determine the assessable value under section 4 (A) of the Act. Therefore, the impugned order is not sustainable. He further submitted that the demands beyond normal period of limitation are not sustainable as earlier show cause notice in respect to .....

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ble. He further submits that the alleged discrepancy was detected during audit on 14.07.2008 to 18.07.2008. The goods sold to Maruti were seized on 01.12.2008. However, the first show cause notice was issued on 07.05.2010, therefore, the entire amount of duty in the said show cause notice is barred by limitation. He further submits that demand for the period January 2009 to November 2009 is also barred by limitation as show cause notice has been issued on 07.01.2011. In these terms, he prayed th .....

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fore us for determination is that whether the goods supplied to the distributor in wholesale packages are liable to be assessed under section 4(A) of the Central Excise Act 1944 or not? 10. Before deciding the issue we have to see the various provisions of the Standard of Weight and Measures (Packaged Commodities) Rules 1977 as per Rule 2(x) of the said Rules defines wholesale packages which is reproduced here as under: "Rule 2(x) - definition of wholesale package: "Wholesale package&q .....

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ules." 11. We also find that Rule 2 (J) defines multi piece packages. It is also reproduced as under: "multi-piece package" means a package containing two or more individual packaged or labeled pieces of the same commodities of identical quantity, intended for retail sale, either in individual pieces or the package as a whole" 12. We also find that Rule 29 of the said rules requires the declaration to be made on the wholesale packages and same is as under: "PROVISIONS AP .....

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res or number of the commodity contained in wholesale package" 13. On going through the above said provisions, we find that Multi piece packages means a package containing individually packed pieces of the same commodity of identical quantity for retail sale either in individual pieces or the package as a whole. As per the above definition of multi piece packages and the definition of wholesale packages, we find that sub clause 2(x) is applicable to the facts of this case, as the fasteners .....

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) specifies that on wholesale packages the declaration to be made by the assessee and as per the said Rule there is no requirement to declare retail sale price. Therefore, we hold that appellant are not required to declare retail sale price on wholesale packages. 14. In these circumstances, we are of the view that on merits, the appellants are having a case that they are clearing their goods as wholesale packages to the distributors / intermediaries to sell the goods in question to the consumer .....

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