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2016 (4) TMI 13 - CESTAT CHENNAI

2016 (4) TMI 13 - CESTAT CHENNAI - TMI - Valuation of Goods under Section 4 i.e Transaction Value or under Section 4A i.e MRP based value - Differential duty demand - revenue proposing to assess the goods under Section 4A as per the M.R.P - goods cleared to industrial consumers by the assessee as free supply - Held that:- As decided in Jayanti Food Processing (P) Ltd. Vs CCE Rajasthan [2007 (8) TMI 3 - Supreme Court ] what is material is the definition of “retail sale price”. The requirement of .....

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of the SWM Act becomes relevant. Therefore, unless there is an element of sale, as contemplated in Section 2(v), Rule 6(1)(f) will not be attracted and thus such package would not be governed under the provisions of SWM (PC) Rules which would clearly take such package out of the restricted arena of Section 4A(1) of the Act and would put it in the broader arena of Section 4 of the Act

The ratio of the above case law is squarely applicable to the present case as the goods are sold to t .....

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& E/1237/2004 & E/MISC/415, 416/2012 & E/1368/2004 & E/1369/2004 - Final Order No.41763-41766/2015 - Dated:- 6-7-2015 - SHRI R.PERIASAMI, TECHNICAL MEMBER AND SHRI P.K. CHOUDHARY, JUDICIAL MEMBER For the Petitioner : Shri Raghavan Ramabadran, Advocate For the Respondent : Shri M. Rammohan Rao, DC (AR) ORDER PER R.PERIASAMI Out of these four appeals, two are filed by the assessee and two are filed by Revenue. In Revenue s appeals, two MISC applications are filed by the respondent for change of ca .....

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supply of 250 gms and 35 gms. of detergent powder to be supplied as free gifts along with their products. Assesses have sought permission for clearance of the goods under Section 4 which are supplied to industrial consumers and cleared the said goods to their customers by assessing under Section 4 of Central Excise Act during the periods May 2002 to Oct 2002 and November 2002 to March 2003. Show cause notices dt.3.4.2003 and 22.8.2003 were issued to the assessee covering the aforesaid periods p .....

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n these Revenue appeals, the respondents M/s.Henkel SPIC India Ltd. have filed two MISC applications for change of cause title to change the name of the respondent s name from M/s/Henkel SPIC India Ltd. to M/s.Henkel India Ltd. under the scheme of amalgamation by virtue of Hon ble High Court s order dt. 26.4.2005. Ld. Counsel produced the copy of the Hon ble High Court s in C.M.P.Nos.64 & 65/2005 dt. 26.4.2005. Accordingly, the MISC applications for change of cause title are allowed. Registr .....

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se Act. Two show cause notices were issued covering the period December 2001 and February 2002 and June 2002 to August 2002 for rejecting assessment under Section 4 and proposing to demand differential duty based on M.R.P under Section 4A. The adjudicating authority in his OIO Nos.6/03 dt.27.3.2003 and 8/03 dt. 30.4.2003 dropped both the SCNs. Revenue preferred appeals before Commissioner (Appeals) against the adjudication orders. Commissioner (Appeals) upheld the impugned order and rejected the .....

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nly for the goods in relation to which it is required under the provisions of Standards of Weights and Measures Act, 1976 (S.W.M. Act) and not for goods sold in bulk to industrial consumers and hence Section 4A will not be applicable on these products. He relied Board s circular dt. 28.2.2002. He also drew our attention to Rule 2(r) and Rule 6(1) (f) of S.W.M. Act will only apply when the goods are to be sold to the ultimate consumers. In the present case the goods are purchased by the manufactu .....

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31) ELT 53 (Tri-Delhi) (4) Sun Direct TV Pvt. Ltd. Vs CC (Sea) Chennai 2009 (243) ELT 705 (Tri.-Chennai) (5) Butterfly Gandhimati Appliances Ltd. & Another Vs CCE Chennai-III 2014-TIOL-2466-CESTAT-Mad. 5.2 In the Revenue s appeals in respect of respondent M/s.Henkel India Ltd. he reiterated the findings of both adjudicating authority and appellate authority and submits that the authorities have correctly dropped the proceedings. He submits that adjudicating authority has correctly relied Boa .....

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and falls under S.W.M.Act. Assessees themselves were clearing these goods under M.R.P basis for their own sales whereas for sale to these free supply goods, they have adopted Section 4 which is not correct. He submits that even if the goods are sold as free gifts, once the goods are covered under M.R.P., Section 4A should be applicable. He submits that Board s circular dt. 28.2.2002 is not applicable and also submits that retail sale includes sales to industrial consumers for their own consumpti .....

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these goods were supplied to industrial consumers for their own consumption. In the case of assessee s appeals, we find that the facts are not under dispute. The period of dispute relates to May 2002 to March 2003. The detergent powders are sold to the consumer i.e. M/s. M/s.Duncan s India Ltd., M/s. Duncan s Tea Ltd. & M/s.Tata Tea Ltd. who in turn give these goods as free gifts along with their final products. 8. In the case of Revenue appeals also, the goods were supplied by the responde .....

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ice or transaction value under Section 4. We find that the issue stands settled by the Hon ble Supreme Court in the case of Jayanti Food Processing (P) Ltd. Vs CCE Rajasthan (supra). The relevant paragraphs of the Supreme Court order are reproduced as under :- "27. The Tribunal in Para 8 of its judgment has observed : Once the goods are specified items under Section 4A(1) and are excisable goods chargeable duty (sic) with reference value, then such value shall be deemed to be the retail sal .....

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1977. We are afraid the law is too broadly stated here. It may be that chocolates manufactured by the appellant are required to bear the declaration of MRP but that cannot be true of all the chocolates. In this the Tribunal has ignored Para 6 of the aforementioned circular dated 28-2-2002 wherein it is specifically provided that there would be instances where the same notified commodity would be partly assessed on the basis of MRP under Section 4A and partly on the basis of normal price prior to .....

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not applicable to the present case. A cursory glance at the circular would suggest that it is applicable to the present case where two commodities have been sold as a market strategy. 28. Shri Subba Rao also heavily relied on Para 9 of the impugned judgment and further relied on the first Explanation of Section 4A and suggested that the retail sale price would be the maximum price at which the excisable goods in packaged form may be sold to the ultimate consumers and includes all taxes, local o .....

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rovides that the retail price , i.e., the maximum price would include all taxes, local or otherwise, freight, transport charges, commission payable to dealers and all charges towards advertisements, delivery, packing, forwarding and the like. The further thrust of the explanation is on the notion that the price is the sole consideration of such sale. The Tribunal has mixed up Explanation I with Explanation II which is not permissible. This was not a case under Section 4A, Explanation II(b) becau .....

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be given as a free gift, would be of no consequence as even if the appellant itself intended to give the bar of KITKAT as a free gift to its customers along with other item, the appellant would not be in a position to claim that there is no assessable value of the goods and as such no duty of excise shall be charged on the same. The logic is clearly faulty. In the given circumstances, the appellant would undoubtedly be assessable to duty under Section 4 of the Act. It is not as if the appellant .....

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unt to distribution and would, therefore, be amounting to retail sale and the package of KITKAT would be retail package . However, what is material is the definition of retail sale price . The requirement of Rule 6(1)(f) is specific. It requires the retail sale price of the package be printed or displayed on the package. If there is no sale involved of the package, there would be no question of Rule 6(1)(f) being attracted. There is a clear indication in the definition of retail sale price as pr .....

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