2014 (12) TMI 1026 - AT - Central Excise

Valuation of goods - Section 4A - Discharge of excise duty liability on Retail Sale Price (RSP) basis - Held that - issue is no longer res integra. Since in the instant case, the goods are not meant for retail sale, the question of valuation of the same under Section 4A would not arise at all. This is the view taken by the Tribunal in the appellant s own case 2008 (8) TMI 77 - CESTAT NEW DELHI and Geoffery Manners & Co. Ltd. 2006 (8) TMI 56 - CESTAT, MUMBAI - Decided in favour of assesse.

Summary

Issues:
Valuation of toothpaste supplied as free samples for excise duty assessment under Section 4A of the Central Excise Act, 1944.

Analysis:
The case involved the appellant, a toothpaste manufacturer, who supplied Aquafresh brand toothpaste as free samples along with another product. The appellant discharged excise duty on the basis of the Cost Construction method for the toothpaste supplied as free samples, arguing that since these goods were not intended for retail sale, the provisions of Section 4A should not apply. The Revenue contended that excise duty under Section 4A should be applied even for toothpaste not intended for retail sale but supplied as free samples. Notices were issued, and demands were confirmed, leading to the appeal.

The appellant's counsel argued that the Retail Sale Price (RSP) basis assessment should only apply when there is a statutory requirement to declare RSP on retail packages intended for retail sale. Since the toothpaste supplied as free samples was not meant for sale, the provisions of Standards of Weights and Measures Act and Packaged Commodities Rules should not apply. The appellant followed the principles of valuation based on the Cost Construction method as per the Ujagar Prints case. The counsel also cited previous Tribunal decisions supporting the valuation of goods supplied as free samples under Section 4 instead of Section 4A.

The Revenue, represented by the Joint Commissioner, acknowledged that previous Tribunal decisions favored the appellant's argument regarding the valuation of goods supplied as free samples.

The Tribunal, after considering the arguments from both sides, concluded that the issue was no longer res integra. Since the toothpaste in question was not meant for retail sale, the valuation under Section 4A did not apply. The Tribunal relied on its previous decisions and allowed the appeals, setting aside the impugned orders with any consequential relief as per the law.

In summary, the judgment clarified that toothpaste supplied as free samples, not intended for retail sale, should be valued for excise duty assessment under Section 4 instead of Section 4A, based on the Cost Construction method, as established in previous Tribunal decisions.