2011 (9) TMI 293 - AT - Central Excise

SSI exemption in terms of Notification No.08/2003-CF dated 01.03.2003 - Revenue contended that Duty has been demanded on the ground that the Appellants should have paid duty on highest of the different MRP marked on different bottles sold to different persons - should have been paid on the basis of the invoices value and not under Section 4A of Central Excise Act, 1944 - Appellant submitted that there are several decisions of the Tribunal taking a view that if different MRPs are not on the same package, the highest of the same cannot be taken for the purpose of assessment under Section 4A - Held that - Demand of duty not sustainable. Duty on samples - Held that - samples have not been removed from the factory and if the goods are not removed duty cannot be paid.

Summary

Issues:
1. Exemption from payment of duty for small scale industrial unit under Notification No.08/2003-CF.
2. Assessment of duty based on different MRPs on bottles.
3. Treatment of controlled samples for levy of excise duty.
4. Assessment of clearances to railways under Section 4A of Central Excise Act, 1944.
5. Imposition of penalty under Section 11AC and benefit of payment of 25% duty towards penalty.

Analysis:
1. The Appellants, a Small Scale Industrial Unit, claimed full exemption from duty under Notification No.08/2003-CF for the first clearance value of Rupees One Crore for goods manufactured under Own Brand or other brands not availing SSI exemption. The Tribunal acknowledged the exemption eligibility.

2. The dispute arose regarding the assessment of duty based on different MRPs on bottles sold to various parties. The Appellants argued, citing Tribunal decisions, that the highest MRP should not be considered if not on the same package. Relying on precedent cases, the Tribunal agreed with the Appellants, ruling in their favor.

3. Regarding controlled samples, the Appellants contended that duty cannot be levied if the samples are not removed from the factory. Citing a Tribunal decision, the Appellants' stance was supported, leading to the exclusion of controlled samples' value for excise duty calculation.

4. The issue of assessing clearances to railways under Section 4A of the Central Excise Act, 1944 was raised. The Appellants did not provide clear submissions, leading to uncertainty. In the absence of clarity and submissions, the Tribunal deemed assessing goods based on invoice value for railways as appropriate.

5. Lastly, the Tribunal addressed the penalty under Section 11AC, noting that the lower authorities did not allow the benefit of a 25% duty payment towards the penalty within 30 days. Citing a Delhi High Court decision, the Tribunal granted the Appellants the option to avail the benefit and adjust the duty payable on clearances to railways accordingly, ensuring a refund of the balance after due process.

This comprehensive analysis of the judgment highlights the key issues addressed by the Appellate Tribunal CESTAT, Kolkata, providing a detailed insight into the legal reasoning and decisions made on each matter.