2006 (3) TMI 610 - AT - Central Excise

Summary

Issues:
1. Confirmation of demand of duty and imposition of penalties against M/s. Viacom Electronics Pvt Ltd.
2. Assessment of duty based on maximum retail price (MRP) declared on goods.
3. Allegations of selling goods above declared MRP by M/s. Baron International Ltd.
4. Discrepancy in affixing MRP leading to duty liability under a different notification.
5. Contention of the manufacturer regarding responsibility for extra amounts collected by dealers.
6. Interpretation of Circular No. 432/65/98-CX 3 for duty calculation.
7. Comparison with a previous Tribunal's decision and subsequent Supreme Court ruling.
8. Stay petition considerations based on financial hardship and revenue's interest.

Analysis:
1. The judgment pertains to the confirmation of a significant duty demand against M/s. Viacom Electronics Pvt Ltd., along with penalties under the Central Excise Act, 1944. The impugned order by the Commissioner raised a duty demand of Rs. 16,47,74,592 as differential duty, and additional penalties were imposed under various provisions of the Central Excise Rules, 1944.

2. The case revolved around the assessment of duty on AKAI brand Colour Television sets based on the MRP declared by M/s. Baron International Ltd. The goods were cleared on payment of duty according to the maximum retail price (MRP) declared on the products, as per the relevant notification.

3. Allegations surfaced that M/s. Baron International Ltd. sold the Colour Television Sets above the declared MRP, leading to investigations and subsequent proceedings against the manufacturer, M/s. Viacom Electronics Pvt. Ltd. Statements collected during the investigation supported the revenue's position.

4. The dispute arose from the discrepancy in the affixed MRP on the goods, resulting in a shift in duty liability under a different notification. The revenue contended that since the declared MRP was incorrect, the duty had to be calculated under a specific rate prescribed in the alternative notification.

5. The manufacturer argued that they discharged duty based on the MRP provided by M/s. Baron International Ltd. and should not be held responsible for extra amounts collected by dealers. Reference was made to a previous Tribunal decision and a subsequent Supreme Court ruling to support their stance.

6. The Commissioner relied on Circular No. 432/65/98-CX 3 for interpreting the duty calculation methodology. The Circular clarified that if goods were sold above the declared MRP, the price on the package could not be considered the retail sale price, necessitating duty calculation based on specific rates.

7. The comparison with the previous Tribunal decision and Supreme Court ruling highlighted the legal precedent in similar cases, providing context for the arguments presented by the manufacturer in this case.

8. The judgment considered the financial hardship pleaded by the appellants but also emphasized the need to safeguard the revenue's interest. A partial deposit of Rs. 1.00 crore was directed within a specified period, with the remaining duty and penalties waived subject to compliance, pending the appeal's resolution.