2004 (3) TMI 629 - AT - Central Excise

Summary

Issues: Misdeclaration of Maximum Retail Price (MRP) leading to duty demand and penalty imposition.

In this case, the appeal was directed against the Order-in-Appeal passed by the Commissioner (Appeals) who rejected the appeal against the order-in-original. The appellants, who manufacture colour TVs of Videocon and Sansui brands, sell them to M/s. Videocon International. The allegation was that despite instructions to revise the Maximum Retail Price (MRP) upwards from 7-9-1998, the appellants did not comply during the period from 7-9-1998 to 30-9-1998, leading to a misdeclaration of MRP. Consequently, a duty demand of Rs. 2,46,330/- was confirmed under Rule 9(2) along with an equivalent penalty. The appellants contested both the duty and the penalty.

The main defense put forth by the appellants was that they did not revise the prices based on the buyer company's instructions because the cartons in which the TVs were packed already had the pre-revised MRP printed on them. They argued that the clearances were made based on the old price declared on the cartons, and the buyer was not charged based on the new price. However, the Tribunal found this defense without merit. Since M/s. Videocon International were the brand owners of the goods, the price declared by them with effect from 7-9-1998 should have been followed nationwide. The failure to declare the revised prices amounted to a violation of Section 4A of the Act. Therefore, the lower authorities were justified in confirming the duty demand and imposing the penalty.

Despite upholding the duty demand and penalty imposition, the Tribunal noted that the penalty needed to be reduced. It was observed that the goods were removed against proper documents and their full accountal in the statutory record, and the short payment occurred due to the appellants misinterpreting the provisions of the law. Consequently, the penalty was reduced to Rs. 10,000/-. Therefore, the orders of the lower authorities were upheld, and the appeal of the appellant was partly allowed with the modification of the penalty amount.