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TMI Blog2024 (9) TMI 1490X X X X Extracts X X X X X X X X Extracts X X X X ..... yeshbhai N Patel ; Shri Arvindbhai N Patel ; Oracle Granito Ltd. ; Vinodbhai Maganlal Patel ; Ashwin Maganlal Patel ; Dharmendrabhai Patel ; Nice Ceramics Pvt Ltd. ; Santro Tiles Ltd. ; Prakashbhai Dahyabhai Patel ; Shri Manshuklal Mavjibhai Patel ; Mahendrabhai Amichandbhai Patel ; Kamleshbhai Bhagubhai Patel ; Hasmukhbhai Danjibhai Patel Versus Commissioner of Central Excise & Service Tax - Rajkot HON'BLE MEMBER (JUDICIAL), MR. RAMESH NAIR And HON'BLE MEMBER (TECHNICAL), MR. RAJU Shri P.D. Rachchh, Nirav Shah, Amal Dave, Parth Rachchh, with Ms. Krati Jain, Advocates for the Appellant Shri Rajesh Nathan, Authorised Representative for the Respondent ORDER RAJU These appeals have been filed by various manufacturers of tiles against demand of central excise duty and imposition of penalties. 2. Similar issues were earlier decided vide the decision in the case of Acme Ceramics vs Commissioner of Central Excise, 2014 (303) ELT 542 (Tri. Amd.). In the said decision, following was held: "8. We have considered the detailed submissions made by both sides and perused the records as also the written submissions filed by both sides after the conclusion of hearing. 9. Essenti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ared on such goods less such amount of abatement, if any, from such retail sale price as the Central Government may allow by notification in the Official Gazette. (3) The Central Government may, for the purpose of allowing any abatement under sub-section (2), take into account the amount of duty of excise, sales tax and other taxes, if any, payable on such goods. (4) Where any goods specified under sub-section (1) are excisable goods and the manufacturer - (a) removes such goods from the place of manufacture, without declaring the retail sale price of such goods on the packages or declares a retail sale price which is not the retail sale price as required to be declared under the provisions of the Act, rules or other law as referred to in sub-section (1); or (b) tampers with, obliterates or alters the retail sale price declared on the package of such goods after their removal from the place of manufacture, then, such goods shall be liable to confiscation and the retail sale price of such goods shall be ascertained in the prescribed manner and such price shall be deemed to be the retail sale price for the purposes of this section Explanation 1. - For the purposes of this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lso any person who engages in their production or manufacture on his own account; (g) "prescribed" means prescribed by rules made under this Act; 12. For the period prior to 1-3-2008, we have to record that the provisions of sub-section (4) of Section 4A were enacted in the statute which is reproduced hereinabove, if read, would indicate that if the manufacturer declares retail price which is not the correct retail price as required to be declared under the provisions of the Act, then the ascertainment of such retail sale price will be done in a prescribed manner. We fine that though the provisions of sub-section (4) of Section 4A was brought into statute from 14-5-2003, how to redetermine the RSP in the case of misdeclared RSP was not "prescribed" by the Central Government till the issuance of Notification No. 13/2008-C.E. (N.T.), dated 1-3-2008. This would effectively mean that the Legislature in its wisdom has considered a situation wherein the RSP which is declared could be wrong RSP, thought of remedying the situation by inserting the provision of sub-section (4) in Section 4A, but had not prescribed the rules how the redetermination has to be done till 1-3-2008. It can be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s the law which is settled by the Apex Court. We find that our this view is fortified by the decision of the Co-ordinate Bench of the Tribunal in the case of M/s. Ravi Foods Pvt. Ltd., wherein similar issue came before the Bench. In the case of M/s. Ravi Foods Pvt. Ltd., the Revenue sought to redetermine the RSP of the goods which were covered under the provisions of Section 4A of the Act, by adding the value/amount received not accounted for by the appellant therein. The relevant paragraphs from the said judgment are reproduced herein below. 12. We find that the provisions of Section 4A during the relevant period needs to be considered for coming to a conclusion whether the amount quantified by the authorities in the show-cause notice as indicated hereinabove would stand test of law or not. The provisions of Section 4A are as under :- SECTION 4A. Valuation of excisable goods with reference to retail sale price. - (1) The Central Government may, by notification in the Official Gazette, specify any goods, in relation to which it is required, under the provisions of the Standards of Weights and Measures Act, 1976 (60 of 1976) or the rules made thereunder or under any other law fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of such retail sale prices shall be deemed to be the retail sale price; (b) where the retail sale price, declared on the package of any excisable goods at the time of its clearance from the place of manufacture, is altered to increase the retail sale price, such altered retail sale price shall be deemed to be the retail sale price; (c) where different retail sale prices are declared on different packages for the sale of any excisable goods in packaged form in different areas, each such retail sale price shall be the retail sale price for the purposes of valuation of the excisable goods intended to be sold in the area to which the retail sale price relates. It can be seen from the above reproduced Section 4A of the Central Excise Act, 1944, that the said section provides for determination of duty payable on excisable goods on the basis of RSP as per the provisions of Standards of Weights and Measures Act, 1976 and Rules made thereunder. It is undisputed that in the month of December, 2001 and January, 2002, the appellants filed monthly returns indicating the assessable value after availing the abatement in accordance to the notification issued under the said section i.e. 65% o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 37 read with sub-section (4) of Section 4A of the Central Excise Act, 1944 (1 of 1944), the Central Government hereby makes the following rules, namely :- RULE 1. (1) These rules may be called the Central Excise (Determination of Retail Sale Price of Excisable Goods) Rules, 2008. (2) They shall come into force on the date of their publication in the Official Gazette. RULE 2. In these rules, unless the context otherwise requires,- (a) "Act" means the Central Excise Act, 1944 (1 of 1944); (b) "retail sale price" means the retail sale price as defined in Section 4A of the Act; and (c) Words and expressions used in these rules and not defined but defined in the Act or any other rules made under the Act shall have the meaning as assigned therein. RULE 3. The retail sale price of any excisable goods under sub-section (4) of Section 4A of the Act, shall be determined in accordance with these rules. RULE 4. Where a manufacturer removes the excisable goods specified under sub-section (1) of Section 4A of the Act - (a) without declaring the retail sale price on the packages of such goods; or (b) by declaring the retail sale price, which is not the retail sale price as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t if these rules came to be effective on 1-3-2008, the ascertaining of value of similar goods has to be done so, with effect from 1-3-2008 and cannot be used to determine the value for the clearances made prior to 1-3-2008. We find strong force in the contention raised by the learned Counsel that the decision of the Tribunal in the case of Aditya Cement (supra) would squarely cover the issue in favour of the appellants. The relevant ratio in Para 9 of the said decision is reproduced :- "9. It can be seen from the above reproduced rule that it was in context of the definition of "person liable for paying the Service Tax". This provision in itself may not suffice revenue to direct the appellant to discharge the service tax liability as service receiver, on the face of the fact that notification under Section 68(2) of the Finance Act, 1994, was issued by the Central Government only on 31-12-2004. If the contention of the learned SDR is to be accepted, then there was no necessity for the Government to issue Notification No. 36/2004-S.T. notifying the service receiver from non-resident having no office, to pay Service tax, as receiver. By issuing the said Notification, Central Governm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unt of volume, we have already recorded that there is no corroborative evidence nor there is any finding as to the exact quantity of goods clandestinely cleared to come to the conclusion that the value of Rs. 3.75 crores is attributable to the specific quantity of goods on amount of clandestine removal. In the absence of any such details, we are of the considered view that the impugned order is unsustainable. 16. Before parting with the case, we would like to record that since we disposed off all the appeals only on the merits of the case, we are not recording any finding on the other submissions made by both sides on various issues. 17. In view of the foregoing findings, we are of the view that the impugned order is not sustainable and is liable to be set aside and we do so. The impugned order is set aside and all the appeals are allowed with consequential relief. 13. Identical views were expressed by the Tribunal in the case of M/s. ABB Ltd. (supra), we would like to record here that the 3 decisions of the Tribunal i.e. M/s. Millennium Appliances India Ltd, M/s. Ravi Foods Pvt. Ltd., M/s. ABB Ltd. have held a view that prior to 1-3-2008, in the absence of any provisions for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r of determining the turnover of the goods involved in execution of Works Contract. The relevant findings of the Apex Court were rendered on this factual aspect as contained in Para 27 of the judgment. In our considered view, the ratio decidendi from this judgment is that merely because the rules were not framed in Central enactment, it would not mean that no tax is leviable if rules have been framed under said enactment and there is a provision for referential incorporation of the said act in the Central Act. We are of the view that the ratio laid down by Apex Court in the case of M/s. Mahim Patram Pvt. Ltd. does not in any manner support the case of the Revenue as well as the view of the differing member in the case of M/s. Schneider Electrical India Pvt. Ltd.; in the cases in hand the ascertainment/redetermination of RSP has not been enacted or prescribed in any other enactment and as no provisions have been incorporated by reference under Central enactment. In our view, there being no contrary judgment to the views expressed by the 3 decisions of the Co-ordinate Benches of the Tribunal on this issue, even assuming that there was misdeclaration of RSP, period prior to 1-3-2008 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... suggesting as to who altered the MRP on the boxes of tiles, we are of the view that the Revenue authorities cannot turn around and take a stand that the manufacturers are liable to duty, which would effectively mean that they are the persons who have altered the RSP. Yet another angle to the entire case is absence of evidence as to there being alteration of RSP; inasmuch as when the investigations were conducted by the authorities, we find that the investigating authorities have not seized a single carton of the offending goods in the Pan India operation at different dealers" premises, wherein different RSP was declared. It would be beyond imagination that the dealers could not have had any stocks of glazed/vitrified tiles received from the appellants, in their hands when the investigation took place. In the absence of such a crucial evidence, we are unable to hold that the appellant herein can be saddled with a liability of Central Excise duty based upon redetermined RSP, for the period prior to 1-3-2008. 16. We also find the statements of the authorized persons of the manufacturers have stated that they have cleared the glazed/vitrified tiles based upon a RSP declared, which w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... RSP at Morbi was proved to be false to the knowledge of manufacturer or not. If the declared RSP is found to be false to the knowledge of manufacturer at Morbi, then RSP will have to be determined in the manner prescribed in the rules which have been enacted w.e.f 1-3-2008, instead of being determined in any other manner. To that extent, we remand the matter to the adjudicating authority for reconsideration of determining the RSP post-1-3-2008 as per the directions hereinabove and in accordance with law. The adjudicating authority will follow the principles of natural justice before coming to any conclusion. 19. Regarding the demand of duty in respect of cases where the clandestine removal has been alleged, we find that the said allegations and the findings reached by the adjudicating authority are not challenged and during the course of personal hearing, were not pressed. Hence, we, without examining the maintainability or otherwise of these demands on merit, uphold the same along with interest and equal penalty. 20. Since we have disposed of the appeals or merit for the period prior to 1-3-2008 and post-1-3-2008 remanded the issue, we are not recording any findings on variou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id questions were answered in the following manner by the Larger Bench vide Interim order No. 1-23 of 2024 dated 23.01.2024: "90. The reference made by the Division Bench to the Larger Bench of the Tribunal is, accordingly, answered in the following manner: (i) It is not permissible to ascertain the retail sale price of goods removed from the place of manufacture, without declaring the retail sale price of such goods on the packages or declaring a retail sale price which is not the retail sale price or tampering with, obliterating or altering the retail sale price declared on the package of such goods after their removal from the place of manufacture, in respect of clearances made prior to 01.03.2008, on which datethe Central Excise (Determination of Retail Sale Price of Excisable Goods) Rules, 2008 came into force; (ii) In view of the answer to the first question, there is no necessity of answering the second question; and (iii) It is not necessary to answer the third question as both learned counsel for the appellant and the learned special counsel appearing for the department have stated that this question may not be answered by the Larger Bench. 91. The papers may now ..... X X X X Extracts X X X X X X X X Extracts X X X X
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