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TMI Blog2023 (3) TMI 534X X X X Extracts X X X X X X X X Extracts X X X X ..... Hindusan Unilever Ltd.& Prime Healthcare Products is not Governed by Section 4A for the purpose of valuation. He further submits that the identical issue in the case of similarly placed assessee M/s. Contemporary Targett Pvt Ltd this Tribunal vide Final Order No. A/10837/2019 dated 13.05.2019 decided the issue in favour of the assessee. 3. Shri Tara Prakash, Learned Assistant Commissioner (Authorized Representative) appearing on behalf of the revenue reiterates the finding of the impugned order. 4. We have carefully considered the submissions made by both the sides and perused the records. We find that there is no dispute on the fact of the present case that appellant are manufacturing tooth brush and supplying to their principal manufacturer M/s. Hindusan Unilever Ltd. & Prime Healthcare Products. In some of cases the tooth brush is packed in retail pack and MRP, is affixed on it. On such goods, the appellant is discharging duty under section 4A on MRP based valuation, on which there is no dispute. The other type of supply is the tooth brush are packed in bulk quantity in loose form in a carton and supply to their principle manufacturer. The principle manufacturer use this brush ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .80 and the chocolate so purchased at that price by M/s. Pepsico was meant for free supply of the same along with one bottle of Pepsi of 1.5 litres in pursuance of their Sales Promotion Scheme. The appellant cleared the disputed goods after payment of duty at Rs. 4.80 per chocolate in terms of Section 4 of the Act after filing the due declaration on the premise that since the chocolates were being sold to M/s. Pepsico, this was not a "retail sale" and on such chocolates supply there was no requirement to display the maximum retail price and as such the chocolates could not be covered under Section 4A and would eventually be assessable under Section 4 of the Act. However, the Department did not accept this and it issued a show cause notice dated 14-8- 2001 raising a demand of Rs. 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 th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee. Holding thus, the Tribunal dismissed the appeal. 24. Shri Lakshmi Kumaran firstly pointed out that the KITKAT chocolate sold to Pepsico was for free distribution along with 1.5 litre bottle of Pepsi and, therefore, there is no MRP affixed on the chocolate which accompanied the bottle. He further submits, relying on Section 2(v) of the SWM Act that there is no "sale" of the chocolate to the consumers as it is offered free as a gift by Pepsi, which purchased the same from the assessee on contract basis. 25. As against this the learned Counsel Shri Subba Rao supported the order of the Tribunal and pointed out 25. that this 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 v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arun Beverages indicating that KITKAT worth Rs. 12 is given free with the said Pepsi Bottle. In our view this printing of the price on the labels of Pepsi would be of no consequence for the simple reason that it is clearly meant for the advertisement of Pepsi and the MRP is not printed on the chocolate. It may be a move on the part of the Pepsi for advertising its product but that cannot be said to be binding visa- vis Nestle. What is required is the requirement under the Rules of printing the price. Therefore, the true test is not as to whether 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay be" in contradistinction to the expression "shall be" that even if a portion of the goods are sold at a lower rate than the MRP affixed therein, the assessable value in respect of such percentage of goods will not be lowered on the ground that they have actually been sold at a lower rate. In our opinion the thrust of the Explanation I is not as the Tribunal has shown but is more on as to what retail price should be. The explanation provides 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 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 chocola ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4(a) of the SWM (PC) Rules and pointed out that the case was completely covered under that Rule since firstly the package in this case specifically declared that "it was specially packed for Pepsi". The thrust of the argument was that there appears such declaration on the package of KITKAT and secondly it was for the purpose of servicing Pepsi thereby satisfying both the conditions for applicability of Rule 34(a). The Tribunal has rejected this argument in a very 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the learned Counsel appearing for the assessees that the duty has been paid not on the contract price but on the MRP. However, we leave it open to the Department to take an action in accordance with law if it is found that the duty is paid on the contract price and not on MRP. Needless to mention that reasonable opportunity would be given to the assessees to 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. 3. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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