2007 (2) TMI 50 - AT - Central Excise

Valuation (Central Excise) As per commissioner excise duty was required to be paid by the appellant under the provisions of section 4A of CEA but appellant can t agree with it Authority after considering the detail allow the appeal.

Summary

Issues:
Dispute over valuation method for shampoos and ayurvedic cosmetic creams under Central Excise Act.

Analysis:
The appeal concerned the dispute regarding the method of valuation for products like shampoos and ayurvedic cosmetic creams under the Central Excise Act. The Commissioner contended that excise duty should be paid under Section 4A of the Act due to the products being multi-piece packages, not under Section 4, as previously done by the appellant company. The appellant manufactured products under Chapter No. 33, including Fair & Lovely Ayurvedic Cosmetics Cream, Ayush Shampoo, and Ayush Hair Oil Clinic Plus, packed in sachets with weights below 10 gm/ml and cleared in multi-piece corrugated boxes. These products were notified under Section 4A of the Central Excise Tariff Act, 1985, for MRP-based valuation. The dispute centered on whether the MRP-based assessment under Section 4A was applicable to the appellant's products.

The Board's clarification highlighted that Section 4A applies only when MRP is required to be indicated by law, not when voluntarily done by manufacturers. The assessment should be based on Section 4 with Valuation Rules in cases where MRP is voluntarily affixed but not mandated by law. The appellant argued that they were exempt under Rule 34 of the Standards of Weights and Measures Act, 1977, from printing MRP, thus Section 4A valuation should not apply. The Larger Bench's previous decision supported this argument, stating that products weighing less than 10 grams, even in multi-pack sachets, are exempt under Rule 34, making Section 4A inapplicable. Relying on precedent and legal provisions, the appeal was allowed, following the decision in the case of C.C.E., Mumbai v. Urison Cosmetics Ltd.

In conclusion, the Tribunal allowed the appeal, emphasizing that the appellant, not legally required to print MRP on packets weighing below 10gm/ml, should be assessed under Section 4, not Section 4A, for valuation purposes.