2015 (11) TMI 365 - AT - Central Excise

MRP based valuation u/s 4A - affixing of sticker showing revised MRP over the printed MRP - Held that - The bulk of the duty demand ₹ 11,91,164/- is on the basis of the allegation that while on the cartons of the LPG stoves cleared by the appellant from MRP was printed, the appellant had put MRP stickers on the MRP originally printed on the containers, which is much lower than the MRP originally printed on the containers and discharged duty liability on the value determined on the basis of the MRP printed on the stickers. - Tribunal in case of Hindustan Appliances 2002 (1) TMI 729 - CEGAT, NEW DELHI held that MRP indicated on the sticker being put on the MRP printed on the cartons when the same were manufactured is not a declaration of two MRP one originally printed on the cartons and the other shown on the sticker and hence the duty demand in terms of Explanation II to Section 4 on the basis of higher of the two MRP would not be sustainable. The Tribunal in this order also held that affixing of sticker showing revised MRP over the printed MRP on the packages is in accordance with Rule 6 of the Standards of Weight and Measures (Package) Rule, 1977 and it fulfils the requirement of the declaration in terms of Section 4A of Central Excise Act, 1944. Same view has been taken by the Tribunal in the case of Sukumar Soft Drinks vs. CCE, Bangalore (2006 (6) TMI 383 - CESTAT, BANGALORE). - Impugned order confirming duty demand is not sustainable and the same has to be set aside - Decided in favor of assessee. As regards the duty demand of ₹ 1,59,304/- on the basis of allegation that the appellant have cleared LPG stoves in the guise of bio-gas stoves without payment of duty - Matter remanded back - Decided partly in favour of assssee.

Summary

Issues involved:
Allegations of improper MRP declaration on LPG stoves, clearance of LPG stoves as bio-gas stoves, and clandestine removal of stoves without duty payment.

Analysis:

1. Improper MRP Declaration:
The appellant faced a duty demand of Rs. 11,91,164 based on the allegation of affixing a lower MRP sticker on LPG stoves than the original MRP printed on the cartons. The appellant contended that affixing stickers with revised MRP fulfills legal requirements and cited precedents supporting their case. The Tribunal agreed, citing previous judgments, and set aside the duty demand as not sustainable.

2. Clearance of LPG Stoves as Bio-Gas Stoves:
Another duty demand of Rs. 1,59,304 was imposed on the appellant for allegedly clearing LPG stoves as bio-gas stoves to four dealers. The appellant argued that the dealers had placed orders for bio-gas stoves, indicating they dealt with such stoves. The Tribunal found the denial of cross-examination of dealers unjust and remanded the matter for further adjudication.

3. Clandestine Removal Allegation:
A duty demand of Rs. 28,531 was based on impressions on a blank invoice book found in the factory premises, suggesting stoves were sold without duty payment. The Tribunal noted that no inquiry was conducted with three out of four dealers, rendering the demand unsustainable. Consequently, this duty demand was set aside.

In conclusion, the Tribunal set aside the duty demands of Rs. 11,91,164 and Rs. 28,531, along with associated interest and penalties. The matter of the Rs. 1,59,304 duty demand was remanded for fresh adjudication after permitting cross-examination of the dealers. The appeal was disposed of accordingly.