TMI Blog2019 (5) TMI 871X X X X Extracts X X X X X X X X Extracts X X X X ..... her sold as such in retail either by the appellant or the buyers i.e. M/s Colgate Palmolive (India) Limited, Oral care etc. In this identical fact the issue was considered by the Hon ble Supreme Court in the case of JAYANTI FOOD PROCESSING (P) LTD VERSUS COMMISSIONER OF CENTRAL EXCISE, RAJASTHAN [ 2007 (8) TMI 3 - SUPREME COURT] where it was held that valuation cannot be done u/s 4A of CEA. Relying on the Hon ble Supreme Court judgment the Mumbai Bench of the Tribunal in the case of NESTLE INDIA LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, GOA [ 2017 (10) TMI 203 - CESTAT MUMBAI] also held that promotional pack of maggi noodles supplied free with Packet of Tata Tea and such packs of maggi noodles were not bearing MRP with declaration free with Tata Tea . Therefore, provisions of Standards of Weights and Measures Act, 1976 and Rules made there under would not apply on such supplies. Thus, the tooth brushes supplied by the appellant which is not for retail sale but for free supply by the tooth paste manufacturer will not be valued under Section 4A in the hands of the appellant - the value adopted by the appellant under Section 4 is correct and legal which does not need any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or complimentary supplies along with tooth paste, therefore, neither the appellant had intention to clear the toothbrushes for retail sale nor factually the toothbrush were sold as such in retail, therefore, the said toothbrushes supplied are not covered under provision of section 4A of Central Excise Act, 1944 for the purpose of valuation. He invited our attention to the various provision of Section 4A, standards of weights and measure (package commodity Rules 1997), (Rule126, the Legal Metrology) (package commodities Rules 2011) Central Excise Manual of CBECs instruction chapter 3, Notification No. 11/06-CE (NT) dated 29.05.2006. The Board Circular No. 625/16/2002-CE dated 28.02.2002. He also placed reliance on the following judgments: Malhotra Shaving Products (P) Ltd.,-2010 (250) ELT 118 (Tri.,-Bang.) Sridhar Paints Co. P. Ltd.-2008 (224) ELT 455 (Tri. Bang.) Zodiac Clothing Com. Ltd.-2009 (235) ELT 723 (Tri.-Bang.) Crystal Paints-2009 (235) ELT 371 (Tri.-Mumbai) 3. Sh. Sameer Chitkara Ld. Additional Commissioner (AR) appearing on behalf of the Revenue reiterates the findings of the impugned or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and it issued a show cause notice dated 14-8- 2001 raising a demand of ₹ 48,95,370/- along with the proposal to impose penalty upon the appellant with interest. This proposal was contested by the assessee on the aforementioned plea that it was not required to print the MRP under the provisions of SWM Act and the Rules made thereunder. The Commissioner did not accept this and confirmed the demand. The appellant having failed in its appeal before the Tribunal has now approached this Court by way of this appeal. 21. The Tribunal came to the conclusion that the duty was rightly demanded in terms of Section 4A of the Act. 22. At the outset the learned Counsel Shri Lakshmi Kumaranan accepted the position that when such chocolates are sold in the market, they would undoubtedly be required to print the MRP on each chocolate as the SWM (PC) Rules and more particular Rule 6(1)(f) would be applicable to them. Learned Counsel, however, says that his contention is restricted only to the supply made by the assessee to Pepsico. He points out that the said chocolates were not being sold by the manufacturer in retail but were supplied to another company under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is could be viewed as a retail sale . He adopted the reasoning given by the Tribunal on the definition of retail sale holding that the transaction in the present case amounting to retail sale since the chocolates were meant for distribution for consumption by an individual or group of individuals by retails sale and therefore, covered in SWM (PC) Rules. 26. At the outset Shri Lakshmi Kumaran invited our attention to the notification dated 28-2-2002 bearing No. 625/16/2002-CX. He pointed out that by that notification clarification was issued regarding various queries raised expressing the doubts about the assessability of the commodities under Section 4A or Section 4 of the Act. A reference is made to Para 1, Entry 4 of which is as under : Items supplied free with another consumer items as marketing strategy. Example, one Lux soap free with on box of surf. Para 6 of the notification is as under : 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 Standar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er the price is printed on the labels of the accompanying product like Pepsi but whether there was a requirement under the SWM Act or the Rules made thereunder to print the MRP on the wrappers of KITKAT chocolates. The reason given by the Tribunal in Para 10 for distinguishing the earlier judgment in Pepsi Food s case, therefore, has to be ignored as not relevant to the controversy. Once that position is clear, we are left with the notification alone and the aforementioned ruling in Pepsi s case. If the ruling has not been challenged by the Department, the same becomes binding as against the Department. Similar is the situation of the circular. The circular becomes binding as held in the case of Dhiren Chemical Industries (supra). 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 sale price declared on such goods, less amounts of abatements etc. As we have already observed that Weights Measures Act requires chocolate manufactured by the appellant to be printed with MRP o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce 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 11(b) because we do not find different sale prices declared on the different packages of the chocolates. The case of the assessee has been consistent from the beginning that these chocolates were sold to Pepsi under a contract for a particular value and the said chocolates were to be offered as a free gift to the one who purchased a particular bottle of Pepsi (1.5 litres). The Tribunal has further expressed that the argument that the bar of KITKAT was not to be sold by Pepsi in the retail market but was to 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y casual manner by observing : Admittedly, the situation in the present case is not covered by any of the conditions noticed in the said Rule. Learned Counsel Shri Laxmi Kumaran pointed out that there was no question of the application of SWM (PC) Rules apart from any other reasons, because of the applicability of Rule 34. We accept the argument. After all if the contract of the chocolates was for the purpose of advertising of a particular product of the particular industry, it would be covered within the expression servicing any industry . We have already dilated upon the expression servicing any industry in the earlier part of our judgment. Those observations would similarly apply to the present appeal also. With the result this appeal has to be allowed by setting aside the order of the Tribunal. We accordingly allow this appeal without any order as to costs. Civil Appeal No. 2877/2005 Civil Appeal No. 6168/2005 Civil Appeal No. 5840/2006 35. These appeals filed by the Revenue Department are against the Electrolux Kelvinator Ltd., and Electrolux India Ltd. These cases pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... put their say in case the Department decides to proceed against the assessees on this ground. However, the appeals filed by the Revenue would have to be dismissed and are accordingly dismissed. In the facts and circumstances of the case there will be no order as to costs. 5. Though the Hon ble Supreme Court disposed of various appeals under common order, however, the appeal No. 1738/2004 is on the similar fact of the present case. Relying on the Hon ble Supreme Court judgment the Mumbai Bench of the Tribunal in the case of Nestle India Limited (Supra) also held that promotional pack of maggi noodles supplied free with Packet of Tata Tea and such packs of maggi noodles were not bearing MRP with declaration free with Tata Tea . Therefore, provisions of Standards of Weights and Measures Act, 1976 and Rules made there under would not apply on such supplies. As such valuation of such goods cannot be done under Section 4A of Central Excise Act, 1944 and the appeal of the assessee was allowed. It can be seen that from the above Hon ble Supreme Court judgment in the case of Jayanti food processing (P) Ltd. (Supra) and Nestle India Limited (Supra) the issue is no longer res ..... X X X X Extracts X X X X X X X X Extracts X X X X
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