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Commissioner Of Central Excise & Customs, Mumbai Versus M/s LSR Speciality Oils Pvt Ltd. And Vice-Versa

2016 (2) TMI 62 - CESTAT MUMBAI

Valuation - MRP based value or transaction value - whether 50 Ltrs package of Lubricating oil should be valued as per Section 4 or 4A? - Held that:- The fact emerges is that the goods in question are not sold to industry and are is not used as raw material by any industry, it is admitted position that 50 Ltrs. Package is sold to the truck owners who consumed themselves. In such situation, it cannot be said that 50 Ltrs package is covered under the exemption provided under Rule 34 of Standards of .....

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y, we find that all the show cause notices were issued within the normal period of one year, no suppression of mis-statement exists in the present case. Moreover, issue involved in the present case is purely of interpretation of valuation provisions. In view of this undisputed fact we are of the view that penalty of equal amount is not warranted in the facts and circumstances of the case. We therefore reduce the penalty from ₹ 9,28,432/- to ₹ 2,00,000/- - While confirming the de .....

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/411/Bel/2006 dated 30/6/2006 passed by the Commissioner of Central Excise (Appeals), Mumbai, wherein Ld. Commissioner (Appeals) has dismissed the appeal of the appellants. 2. The fact of the present case is that assessees are engaged in the manufacture of excisable goods i.e. Lubricating Oil falling under chapter sub-heading No. 2710.90 of the First Schedule to Central Excise Tariff Act, 1985 on job work basis for M/s. Esso Petroleum India Pvt Ltd up to 31/7/2002 and from 1/8/2002 M/s. Exxon Mo .....

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basis under Central Excise valuation Rules, 2000. However, prior to 1/7/2001 the assessee were clearing the goods packed in 50 Ltrs containers on payment of Central Excise duty on assessable value based on MRP under Section 4A of the Central Excise Act, 1944 and with effect from 1/7/2001 they have started paying duty on assessable value based on cost construction under Central Excise Valuation Rules, 2000. After 1/8/2002 i.e. after taking over the business of M/s. Esso Petroleum India Pvt Ltd by .....

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r-in-original assessee filed appeal before the Commissioner (Appeals) who upheld the order in originals and rejected the appeal of the assessee. Aggrieved by the impugned orders assesee filed Appeals No.E/2970/06, E/1067/07 and Revenue filed Appeal No. E/55/07-MUM for setting aside Order-in-Appeal No. AT/717/Bel/2006 dated 27/11/2006 seeking enhancing the penalty imposed to the maximum penalty specified under Rule 25 of the Central Excise Rules, 2002. 3. Shri. Sushant Murthy, Ld. Counsel for the .....

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equired to be affixed accordingly the said goods will not be covered under Section 4A in terms of provisions of Standards of Weights and Measures Act. He further submits that even MRP is affixed though it is not required as per the provisions of relevant Act the duty cannot be charged on the value as per Section 4A in terms of CBEC Circular No. 411/44/98-CX dated 7/1/1998. He also relied upon the CBEC Circular No. 625/16/202 dated 28/2/2002 wherein it was clarified that in respect of goods which .....

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in clandestine removal or has intention to evade excise duty. In support of his submission, he placed reliance on following judgments: (a) India Cements Ltd. vs. CCE [2002 (150) ELT 1344 (Tri)] (b) Kshetriya Shree Gandhi Ashram, vs. CCE [2002 (150) ELT 834 (Tri)] (c) BPL Sanyo Utilities vs. CCE [2002 (149) ELT 1416 (Tri.)] 3.2 As regards department's appeal for enhancement of penalty imposed in one of the order in Original No. JC/27/VP/05-06 dated 29/10/2005 and upheld by the Order-in-Appeal .....

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de the excise duty which is proved on the fact that prior 1/7/2001 the assessee was paying excise duty under Section 4A on the same 50 Ltrs pack therefore they have knowingly stopped paying duty. In these circumstances, they are liable for penalty equivalent to the duty. He further submits that Ld. Commissioner has wrongly held that once the order was passed on the party's appeal which includes penalty, order of the penalty was merged in the order-in-appeal and applying the doctrine of merge .....

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] (b) Commisioner of C. Ex, Mumbai II vs. Godrej & Boyce Mfg. Co. Ltd [2009(233) ELT 446 (Bom)] (c) Maxim Adhesive Tapes Pvt Ltd. Vs. Commissioner of Central Excise, Daman - 2013-TIOL-837-CESTAT-AHM 5. We have carefully considered the submissions made by both sides. 6. We find that the issue on merit involved is whether 50 Ltrs package of Lubricating oil should be valued as per Section 4 or 4A. As per the facts of the case, we find that the 50 Ltrs package is sold in the market through distr .....

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ackages Nothing contained in these rules shall apply to any package containing commodity if, - (a) the marking on the package unambiguously indicates that it has been specially packed for the exclusive use of any industry as a raw material or for the purpose of servicing any industry, mine or quarry: PROVIDED that this exemption shall not be available in respect of- (i) any yarn which is sold in hanks to handloom weavers; (ii) any component, part or material used in any workshop, service station .....

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, if sold by weight or measure.] (c) - (d) - (e) - (f) - From the above Rule, it is clear that if the goods are used as raw material by the industrial user then it will not be treated as retail sale and MRP is not required to be affixed. In the circumstances of the case, the fact emerges is that the goods in question are not sold to industry and are is not used as raw material by any industry, it is admitted position that 50 Ltrs. Package is sold to the truck owners who consumed themselves. In s .....

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ant for the reason that in the said Board circular it is clarified that as per standards of Weights and Measures Rules, if MRP is not required to be affixed then goods should be assessee in terms of Section 4. In the present case as discussed above, 50 Ltrs package is required to be affixed with MRP and no exemption is available. The Board Circulars have no relevance in the facts of the present case. 6.2 Regarding the judgment of Castrol India Ltd (supra) relied upon the assessee, we find that i .....

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