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2014 (8) TMI 658 - AT - Central ExciseValuation - Transaction value or MRP based value -ceramic tiles - appellant s defence was that once they have declared retail sale price of such goods duty is leviable under section 4A of Central Excise Act, 1944 but not under section 4 of the said Act - Commissioner concluded that such clearances were not eligible for valuation under section 4A of the Act - Held that - In respect of exemption under Rule 34 of the PC Rules, 1977, it has been observed that MRP declaration was not required based on the decision of Tribunal in the case of CCE, New Delhi vs. Trishul Research Pvt.Ltd.- 2002 (4) TMI 130 - CEGAT, COURT NO. I, NEW DELHI wherein it has been held that soap supplied to hotel industry on contracted prices required no declaration of MRP when such soap was not to be sold but is issued to the guests who were staying in the hotel, valuation of such soap was to be done under section 4 of the Act. On the basis of same premise, it has been observed that different class of buyers viz. Builders/contractual/ industrial/hospitals, hotels etc. were covered within the term industry and valuation of such ceramic titles was correctly covered under section 4 of the Act as per law laid down in Trishul Research case referred to supra. - Decided against the assessee. Extended period of limitation - Held that - Valuation was done by appellant under section 4A with the sole intention to evade payment of duty as is revealed by the fact situation of the case. Suppressing of material facts was manifested resulting in invokation of extended period in terms of first proviso to section 11A of the Act. Once suppression was manifested, appellant was liable to the imposition of penalty and plea of time bar fails - Commissioner has rightly arrived at the conclusion that assessment of goods supplied to bulk buyers should be done under section 4 and not under section 4A. Invokation of extended period of limitation and consequent imposition of penalty under section 11AC is justified - Decided against assessee.
Issues Involved:
1. Whether the ceramic tiles sold in bulk to various buyers should be assessed under Section 4 or Section 4A of the Central Excise Act, 1944. 2. Whether the appellant's reliance on the provisions of the Standards of Weights and Measures (Packaged Commodities) Rules, 1977, and related notifications is justified. 3. Whether the demand is barred by limitation. 4. Whether the imposition of penalty and interest is justified. Issue-Wise Detailed Analysis: 1. Assessment Under Section 4 or Section 4A: The main issue for consideration was whether ceramic tiles, which are pre-packed in retail packs and sold in bulk, should be assessed under Section 4 or Section 4A of the Central Excise Act, 1944. The Department alleged that the appellant cleared ceramic tiles to different bulk buyers, such as builders, contractors, industrial buyers, hotels, and schools, on contracted prices, and thus should be assessed under Section 4. The appellant contended that since they declared the retail sale price (RSP) of such goods, duty is leviable under Section 4A. The Commissioner concluded that clearances to bulk buyers do not attract valuation under Section 4A as they were not sold through retail sale agencies for consumption by an individual or group of individuals, as defined under Rule 2(q) of the Standard Weights & Measures (Packaged Commodities) Rules, 1977. 2. Reliance on Standards of Weights and Measures (Packaged Commodities) Rules, 1977: The appellant argued that the ceramic tiles were notified goods for valuation on the basis of MRP under Section 4A, supported by Notification No.18/1998-CE (NT) and Notification No.52/2000-CE (NT). They contended that there is no bar in central excise law against manufacturers selling goods in retail by themselves, and sales to direct users for their consumption can be regarded as retail sales. The Commissioner, however, held that the goods sold to bulk buyers were not for retail sale as per Rule 2(q) and thus should be assessed under Section 4. The Commissioner also referred to the CBEC Circular dated 28.2.2002, which clarified that goods sold in bulk at contracted prices are to be assessed under Section 4. 3. Demand Barred by Limitation: The appellant contended that the demand was time-barred as the fact of clearance under Section 4A was within the knowledge of the department through visits, audit checks, and declarations filed under Rule 173C of the Central Excise Rules, 1944. The Commissioner, however, held that mere audit and inspection did not constitute knowledge of the department regarding the facts. The appellant failed to provide evidence to substantiate their claim of filing declarations under Rule 173C (2A). The Commissioner concluded that the extended period of limitation was rightly invoked due to suppression of material facts. 4. Imposition of Penalty and Interest: The Commissioner imposed a penalty equivalent to the duty demand under Section 11AC read with Rule 25 of the Central Excise Rules, 2002, and ordered the recovery of interest on the aggregate duty demand. The appellant contested the imposition of penalty and interest, arguing that ceramic tiles were notified for valuation under Section 4A and not Section 4. The Commissioner held that the valuation under Section 4A was done with the intention to evade duty, justifying the imposition of penalty and interest. The plea of time bar was also rejected. Conclusion: The Commissioner rightly concluded that the assessment of goods supplied to bulk buyers should be done under Section 4 and not Section 4A. The invocation of the extended period of limitation and the consequent imposition of penalty under Section 11AC was justified. The appeal was rejected, and the order was upheld.
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