2013 (10) TMI 231 - AT - Central Excise

Valuation of Goods Transaction value u/s 4 or MRP based valuation u/s 4A - Bulk pack of the Tooth Brushes Waiver of Pre-deposit - Held that - Prima facie, bulk pack of the Tooth Brushes which are cleared by the appellant cannot be considered as for retail sale, as the Hindustan Unilever is an industrial consumer who supplies these Tooth Brushes as free supplies to the purchasers of Tooth Pastes Relying upon Jayanti Food Processing (P) Ltd Versus Commissioner of Central Excise, Rajasthan 2007 (8) TMI 3 - Supreme Court the issue to be decided in favour of Assessee - stay granted.

Summary

Issues:
Waiver of pre-deposit of duty amount, interest, and penalty in a case involving the valuation of Tooth Brushes under different provisions of the Central Excise Act, 1944.

Analysis:
The appellant filed a stay petition seeking the waiver of pre-deposit of duty amount, interest, and penalty totaling Rs. 1,65,32,745. The amounts were confirmed as differential duty on Tooth Brushes manufactured and cleared by the appellant, valued under Section 4 of the Central Excise Act, 1944, disputed by the Revenue, which argued for valuation under Section 4A for items notified under it.

The counsel for the appellant referred to the order in original and show cause notice, highlighting that the Tooth Brushes were supplied for free distribution along with Tooth Pastes, emphasizing that no MRP was printed on goods cleared for free distribution. The counsel cited the decision of the Supreme Court in Jayanti Food Processing case and subsequent Tribunal cases, arguing that the appellant was not selling on retail but in combo packs.

The Additional Commissioner (AR) relied on the Supreme Court's decision in Jayanti Food Processing case, mentioning the duty discharge directive under Section 4A for supply to retail consumers like MTNL and BSNL. He noted that the Tooth Brushes were given for free distribution, as per the purchaser, and stressed the need for an assertion of supply for free distribution.

After considering both sides' submissions and reviewing the records, the Tribunal found that the Tooth Brushes were not sold in the open market, not readily marketable, and were supplied in bulk packs to Hindustan Unilever for free distribution along with Tooth Pastes. The Tribunal observed that the provisions of the Standards of Weights and Measures (Packaged Commodity) Rules, 1977, applied to packages intended for retail sale, indicating that the bulk packs for industrial consumers like Hindustan Unilever were not for retail sale. The Tribunal favored the appellant, citing the Jayanti Food Processing case, and granted the waiver of pre-deposit, staying the recovery until the appeal's disposal.