2014 (3) TMI 446 - AT - Central Excise

Valuation - Valuation on basis of transaction value or MRP - Held that - appellant is clearing sachets which contain less than 10 gms of Bru instant coffee powder and which are sold on the basis of numbers. Proceedings were initiated on the ground that the retail sale of the same is not on the basis of weight but on the basis of numbers, therefore, exemption under Rule 34 of Standards of Weights and Measures (Packaged Commodity) Rules 1977 prior to amendment and under Rule 2 subsequent to the amendment is not available and therefore duty should be discharged on the basis of MRP/RSP - Commissioner of Central Excise, Bangalore-I who while passing the order in respect of show cause notices issued for the period from October 2011 to August 2012 has indicated clearly that there were two show cause notices issued earlier which are the show cause notice culminated in the impugned order and are before us and has come to the conclusion that for the period from October 2011 to August 2012, the demands cannot be sustained - Decided in favour of assessee.

Issues Involved:
1. Discharge of excise duty based on MRP/RSP vs. transaction value
2. Imposition of penalty on the appellant and other individuals
3. Applicability of exemption under Standards of Weights and Measures Rules
4. Legal position regarding duty calculation for sachets sold based on numbers
5. Consideration of waiver of pre-deposit in the appeal

Analysis:

1. The main issue in this case was the discharge of excise duty based on the maximum retail price (MRP) or retail sale price (RSP) as opposed to the transaction value. The department contended that duty should be paid according to MRP/RSP under Section 4A, leading to two show cause notices being issued to the appellant for a specific period.

2. The impugned order confirmed the duty demand and imposed penalties on the appellant and two other individuals. The appellant challenged this decision, arguing that the issue had been settled in previous Tribunal decisions and that the duty calculation should be based on transaction value.

3. The appellant's counsel cited various Tribunal decisions and orders by Commissioners of Central Excise to support their argument that duty calculation should not be based on MRP/RSP for sachets containing instant coffee powder sold at specific prices.

4. The Tribunal analyzed the situation and found that the appellant was selling sachets with less than 10 grams of coffee powder based on numbers, not weight. It was established that selling sachets based on numbers did not affect the legal position, as confirmed in previous cases. The Tribunal also noted that previous show cause notices had been dismissed for a subsequent period, indicating consistency in the legal interpretation.

5. After considering the submissions and the precedents cited, the Tribunal decided that there was no need for a final hearing and focused on the issue of waiver of pre-deposit. Concluding that the appellant had a strong case and that the demands could not be sustained, the Tribunal allowed the appeals, set aside the impugned order, and granted consequential relief to the appellants.

This detailed analysis highlights the key legal issues, arguments presented, and the Tribunal's decision in favor of the appellant based on legal interpretations and precedents.

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