2010 (7) TMI 413 - AT - Central Excise

MRP based valuation - unwrapped razor blades in bulk cleared from the factory goods not in retail sale packages - assessee paid duty under Section 4 of the Act - Tribunal found that the unwrapped blades in bulk did not satisfy the test Held that - no requirement of fixation of retail price as the goods were not offered for retail sale from the factory premises of the appellant - differential duty confirmed against the appellant - assessment of the goods under Section 4 of the Act

Summary

Issues:
Demand of differential duty on unwrapped blades under Section 4A of the Act, imposition of penalties, application of MRP based assessment, challenge to demand on various grounds.

Analysis:
The impugned order confirmed a demand for differential duty on unwrapped blades cleared in bulk, along with penalties, based on the assertion that safety razor blades attract duty liability under Section 4A of the Act. The appellant had cleared semi-finished blades without MRP printing, arguing for assessment under Section 4, not 4A. The Tribunal referred to a previous case where it was held that unwrapped blades not intended for retail sale did not fall under Section 4A. The Apex Court's criteria for goods to be assessed under Section 4A were analyzed, concluding that the appellant's goods did not meet the requirements. The Tribunal vacated the impugned order and allowed the appeal, following the precedent set in a similar case.

The revenue contended that safety razor blades, being specified goods under Section 4A, required MRP based assessment. The Tribunal, however, found that the goods in question were semi-finished and not intended for retail sale, thus not meeting the criteria for Section 4A assessment. The appellant argued that the goods did not fall under the SWM Act's requirements for MRP declaration, supporting their assessment under Section 4. The Tribunal upheld the appellant's position, citing previous rulings and criteria set by the Apex Court for Section 4A application.

In challenging the demand, the appellant highlighted that the goods cleared were semi-finished blades not meant for retail sale, hence not subject to MRP based assessment under Section 4A. They emphasized that the Commissioner's observation of duty evasion was unfounded, as the goods did not fall under the PC Rules requiring MRP declaration. The Tribunal agreed with the appellant's interpretation, vacating the demand and penalties imposed.

The Tribunal compared the current case with a previous ruling where a similar dispute was resolved in favor of the assessee, emphasizing the absence of retail packaging and the location where the goods were prepared for sale. Following the precedent and criteria set by the Apex Court, the Tribunal vacated the impugned order and allowed the appeal, aligning with the decision in the previous case.

In conclusion, the Tribunal found that the appellant's goods did not meet the criteria for MRP based assessment under Section 4A, as they were semi-finished and not intended for retail sale. Following established precedents and legal criteria, the Tribunal vacated the demand and penalties, allowing the appeal filed by the appellant.