TMI Blog2018 (1) TMI 1014X X X X Extracts X X X X X X X X Extracts X X X X ..... lar packs were sometimes supplied to institutional buyers. It is not clear whether such duty has been discharged - The matter requires verification as to whether the appellant has been supplying goods to two distinct classes of consumers and whether duty has been discharged for the clearances. Appeal allowed by way of remand. - E/Misc./41544 &41545/2017 and E/341 & 418/2009 and E/515 & 606/2010 - Final Order Nos.40139-40142/2018 - Dated:- 16-1-2018 - Ms. Sulekha Beevi C.S., Member (Judicial) And Shri Madhu Mohan Damodhar, Member (Technical) Shri M. Karthikeyan, Advocate for the Appellant AC (AR) for the Respondent ORDER Per Bench Revenue has filed miscellaneous applications seeking change of cause title from Commissioner of Central Excise, Chennai II to The Principal Commissioner of Central Excise, Chennai I as the Commissionerates have been revised in terms of Notification No. 27/2014-CE (NT) dated 16.9.2014. 2. After hearing both sides, we allow the miscellaneous applications for change of cause title and allow to amend the cause title of the respondent as The Principal Commissioner of Central Excise, Chennai I. 3. The issue arising for consider ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sales account on the basis of the respective RSPs. It was also observed that most of the customers of M/s. SR Water were institutional buyers. Verification was conducted with some of the customers of M/s. SR Water. It was seen that M/s. SR Water receives both regular packs and institutional packs from HCCB and delivered regular packs through institutional customers. That jars of RSP ₹ 50/- was not intended for distinct class of buyers. The department also noticed that prior to April 2004, only one RSP at ₹ 65/- per jar was adopted for the drinking water (of 25 lts.) manufactured by M/s. SRM. Due to competition in the business, they have allowed heavy discounts to high volume customers. The allowance of such high discounts reduced the margin (sale price minus purchase price) of M/s. SR Water who is distributor. To compensate M/s. SR Water, the institutional packs of goods with RSP ₹ 50/- per jar was introduced from April 2004 onwards. M/s. SR Water, the distributor purchased the institutional pack from M/s. HCCB at reduced price but sold the same on the selling price of the regular pack to institutional buyers thereby making their margin. It appeared that the intro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . During the impugned period, the jars marked with MRP ₹ 50/- ₹ 65/- and ₹ 70/- were sold by HCCB to M/s. S.R. Water at the rate of ₹ 21.50, ₹ 30.50 and ₹ 34.00 respectively. M/s. SR Water would in turn be supplying the jars to various parties including the institutional buyer for mutually agreed price. 5.3 The case of the department is that the MRP of ₹ 50/- indicated on the institutional packs does not represent the real MRP and that such products also have to be considered as ₹ 65/- (till November 2004) and ₹ 70/- (from December 2004). The demands have been raised alleging the above, which is factually against law. 5.4 As per Rule 6(1)(f) of SMW (Packaged Commodities) Rules 1977 as it stood during the relevant period, packages intended for retail sale are required to be affixed with the retail sale price of such packages. The term retail sale is defined under Rule 2(q) which shows that the goods are for use of the ultimate consumer. The definition of retail sale price has been adopted in the Central Excise Act from the SWM (Packaged Commodities) Rules. In order to satisfy the requirement, the appellants have affixed RSP ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tutional pack or regular pack. The agreed rate was ₹ 50/- plus 1% resale tax. From this itself it is clear that the goods required to be supplied are not institutional pack since RSP is shown as ₹ 50 inclusive of all taxes. In other words, even to institutional buyers the appellants have supplied regular packs. The buyers have stated they were receiving both regular pack and institutional pack. Thus, the appellants were clearing affixing two different MRP on the same goods identical in quantity and quality. By such reduced MRP, they were helping the distributor to get margin. Even though ₹ 50/- MRP was introduced from April 2004 onwards, the customers were not benefited from the reduced price. The ld. AR took assistance of the illustration given in the Order-in-Original in para 11, which is as under:- i. Purchase price of M/s. S.R. Water for RSP of ₹ 65/- Rs.30.5 ii. Sale price of M/s. S.R. Water to M/s. C.T.S. Rs.40/- iii. Margin of M/s. S.R. Water Rs.9.5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to institutional buyers that such packets are institutional pack and not intended for retail sale. The basic feature of the MRP valuation is to have uniform pricing for the purpose of assessment for same kind of goods of manufacturer. The Central Excise Act, 1944 has adopted these provisions from the SWM Act and (PC) Rules in order to have uniformity in pricing as well as for discharging the duty. If the goods are supplied to institutional buyers and not intended for retail sale, it is not necessary for the appellant to affix the MRP. However, they have affixed MRP and discharged the duty under section 4A. We do not find any allegation made in the show cause notice in this regard, requiring appellant to discharge duty under Section4 as per transaction value. The main allegation is that appellant cannot affix different MRP for same goods in the same area. The appellant asserts that they have discharged duty on the higher value of ₹ 70/- even though these regular packs were sometimes supplied to institutional buyers. It is not clear whether such duty has been discharged. We note that there is no discussion in this regard although appellant has been asserting the same. The ma ..... X X X X Extracts X X X X X X X X Extracts X X X X
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