2007 (6) TMI 56 - AT - Central Excise

Valuation(Central excise) - Revenue contended that valuation was required to be done by the appellant as per Section 4 of the Act not under Section 4A on the ground that their was bulk sale to the institutional buyers - Held that revenue contention was not correct and set aside

Summary

Issues: Valuation of shoes sold to institutional buyers under Section 4 vs. Section 4A of the Central Excise Act, 1944

The judgment by the Appellate Tribunal CESTAT, New Delhi revolves around the dispute concerning the valuation of shoes sold to institutional buyers. The main contention is whether the valuation should be done under Section 4 of the Central Excise Act, 1944, based on transaction value, or under Section 4A, which mandates valuation based on the printed Maximum Retail Price (MRP) minus abatement. The respondent, a manufacturer of footwear, had been valuing shoes sold to all buyers, including institutional buyers, under Section 4A, as footwear is specified under this section. However, a show-cause notice was issued, arguing that valuation should be under Section 4 since there was no retail sale involved in bulk sales to institutional buyers.

The Commissioner (Appeals) upheld the valuation under Section 4A, noting that the shoes had MRP affixed on them, and were not exempt under Rule 34 of the Weights & Measures Rules. The revenue's appeal contested this decision, arguing that since the sales were to institutional buyers for free supply among employees, they did not constitute retail sales. The respondent's counsel emphasized that the shoes were not specifically manufactured for institutional buyers, and the requirements under Section 4A were met, including MRP marking and non-exemption under Rule 34.

The Tribunal analyzed the case, affirming that the appellant's supplies were not exempt from the Weights and Measures Act and Rules, and the branded shoes with MRP markings fell under Section 4A for valuation. Citing precedent cases, the Tribunal clarified that even bulk supplies to institutional buyers are liable for valuation under Section 4A. Ultimately, the Tribunal found the Commissioner's order in line with Section 4A provisions and tribunal decisions, concluding that there was no error or illegality in the decision. Consequently, the revenue's appeals were dismissed, upholding the valuation under Section 4A for shoes sold to institutional buyers.