2008 (12) TMI 627 - AT - Central Excise

Stay/Dispensation of pre-deposit - Valuation (Central Excise) - Soaps supplied to Ministry of Defence and not at all meant for retail sale

Summary

Issues Involved: Valuation of goods supplied to Ministry of Defence under Central Excise Act

Analysis:
The only issue in this case revolves around the valuation of soaps supplied by the appellant to the Ministry of Defence under the Central Excise Act. The Revenue contends that the valuation should be done under Section 4A of the Act. However, the appellant argues that since the goods are solely for the Ministry of Defence and not for retail sale, Section 4A should not apply. The appellant draws support from a Supreme Court decision in Jayanti Food Processing (P) Ltd. v. CCE, Rajasthan, emphasizing that the mere specification of goods under Section 4A(1) does not automatically trigger its application. The appellant asserts that the goods are exclusively for servicing the armed forces or defense personnel, negating the need to declare Maximum Retail Price (MRP) under the Standards of Weights and Measures Act.

The Tribunal, after hearing both sides, acknowledges the strong case presented by the appellant on merits. Consequently, the Tribunal orders a complete waiver of the pre-deposit of duty and penalty demanded in the impugned order until the appeal is disposed of. It further directs that no coercive measures for recovery of dues should be taken during the pendency of the appeal. This decision reflects the Tribunal's recognition of the appellant's arguments regarding the specific nature of the goods supplied to the Ministry of Defence and the inapplicability of Section 4A for valuation purposes. The waiver of pre-deposit and stay on recovery actions aim to ensure fairness and justice during the appeal process.