2004 (5) TMI 447 - AT - Central Excise

Summary

Issues:
- Applicability of higher MRP on Air Conditioners cleared at the factory gate at Silvassa
- Interpretation of Sec. 4A of the Central Excise Act regarding Retail Sale Price

Analysis:
The judgment by the Appellate Tribunal CESTAT, Mumbai involved the issue of waiver of pre-deposit of duty and penalty imposed in the impugned order concerning the dispute over the applicability of higher Maximum Retail Price (MRP) on Air Conditioners cleared at the factory gate at Silvassa. The Adjudicating Authority had adopted the higher MRP of Rs. 22,478/- for sales at the factory gate, ignoring the declared MRP of Rs. 21,000/-. The Tribunal heard both sides where the applicant argued that only one MRP of Rs. 21,000/- was affixed on the packages cleared at the factory gate, while the department justified the higher price adoption based on the definition of Retail Sale Price under Sec. 4A of the Central Excise Act.

The Tribunal considered the explanations under Sec. 4A, particularly explanation (1) and subsequent explanations 2(a) and 2(b). It was noted that only one retail sale price of Rs. 21,000/- was declared on the packages for sale at the factory gate. The Tribunal emphasized that the case for referring to any other price did not arise as per the provisions of the Act. Explanation 2(b) was deemed irrelevant in this case since different prices for sale in different areas were not declared on the package. Therefore, the Tribunal concluded that the applicant had a strong prima facie case for waiver of pre-deposit of duty and penalty, leading to the waiver of the entire duty demand and penalty with recovery stayed pending disposal of the appeals.

In summary, the judgment clarified the interpretation of Sec. 4A of the Central Excise Act regarding the Retail Sale Price and affirmed that in cases where only one retail sale price is declared on the package, the higher price adoption may not be justified under the law. The Tribunal's decision to waive the pre-deposit of duty and penalty was based on the applicant's strong case supported by the legal provisions and explanations under the Act.