2011 (5) TMI 374 - AT - Central Excise

MRP based valuation u/s 4A or transaction value u/s 4 - Base Paints - Sale made to retail dealers - Assessee discharged duty adopting valuation u/s 4A - Revenue demanded duty based on transaction value u/s 4 - Assessee submitted that they are discharging their liability of duty as per Section 4A of the Central Excise Act and it is not a case of non-payment of duties under regular assessment filed by the respondent and nor a case of Section11A. Therefore, the order of seizure of goods/demands is not sustainable within the provisions of Central Excise law. - Held that - No show-cause notice has been served on the respondent. When no show-cause notice has been served no duty can be demanded under Section 11A of the Central Excise Act, 1944. Therefore, the provisions of Section 11A of the Central Excise Act are not applicable.

Summary

Issues:
1. Appeal against the order of the Commissioner (Appeals) regarding attachment of goods.
2. Dispute over valuation of Base Paints under Section 4A or Section 4 of the Central Excise Act.
3. Interpretation of Sections 11 and 11A for recovery of duties from the assessee.

Detailed Analysis:
1. The appeal in question arises from the order of the Commissioner (Appeals) which set aside the order of the Assistant Commissioner and the Superintendent's panchanama for the attachment of goods issued by them. The Revenue filed the appeal challenging this decision.
2. The dispute revolves around the valuation of Base Paints by the appellants under Section 4A (MRP based) or Section 4 (sale price charged from retail dealers) of the Central Excise Act. The Commissioner confirmed a demand of Rs. 5.36 crores against the appellants for the period April 2002 to March 2007 based on the sale price charged by the appellants from their retail dealers. The appellants contested this valuation method and preferred an appeal before CESTAT, which directed them to deposit Rs. 2.5 crores as a pre-deposit under Section 35F for hearing the appeal.
3. The key legal issue involves the interpretation of Sections 11 and 11A of the Central Excise Act for the recovery of duties from the assessee. Section 11 deals with the recovery of sums due to the government, while Section 11A pertains to the recovery of duties not levied, paid, short-levied, short-paid, or erroneously refunded. The Tribunal analyzed these sections and found that in this case, no show-cause notice had been served on the respondent regarding any short levy or short payment of duty. As a result, the provisions of Section 11A were deemed inapplicable, and the Tribunal upheld the lower appellate authority's decision that there were no dues of duty, rendering Section 11 inapplicable.

In conclusion, the Tribunal dismissed the Revenue's appeal, upholding the decision of the lower appellate authority regarding the attachment of goods and the valuation of Base Paints under the Central Excise Act. The judgment provides a detailed analysis of the legal provisions governing the recovery of duties and emphasizes the importance of following due process, including serving show-cause notices, in matters related to duty recovery.