2015 (12) TMI 862 - AT - Central Excise

Valuation - footwears with MRP - exemption vide notification no.5/2006-CE and the subsequent notification no.12/2012-CE - footwears were not embossed with the MRP and as such, the condition of notification requiring the footwears to be indelible marked or embossed with the MRP does not stand fulfilled - Held that - Commissioner himself came to a clear finding that MRP of the footwears was admittedly below ₹ 500/-. In such a scenario, it has to be held that the substantive condition of the notification in question sands fulfilled - The notification grants benefit to the footwears, which are below the MRP of ₹ 250/- or ₹ 500/- and the condition of embossing the same can be held to be in the nature of being sure that the footwears does not exceed the said laid-down limit of MRP. When the Revenue itself is of the view that the MRP was admittedly less than the said prescribed MRP, even if the goods were not marked with the said MRP and especially, when the MRP wad admittedly written on the outer package of the fotwears, the creation of huge demand on the said technical lapse cannot be appreciated. - Stay granted.

Summary

Issues:
1. Confirmation of duty demand and penalty against a company for non-embossing of MRP on footwear.
2. Interpretation of exemption notifications for footwear with MRP below certain limits.
3. Dispute regarding non-embossing of MRP on footwear and its impact on eligibility for exemption.

Analysis:
The judgment by the Appellate Tribunal CESTAT NEW DELHI dealt with the confirmation of duty demand and penalties against a company for failing to emboss the Maximum Retail Price (MRP) on footwear. The central issue revolved around the interpretation of exemption notifications related to footwear with an MRP below specified limits. The case involved two units of the company, where one unit was found embossing footwear with MRP values ranging between Rs. 169 to Rs. 209, while the other unit had stock without MRP embossing. The Commissioner initiated proceedings against the company, alleging they were wrongly availing exemption benefits due to non-embossing of MRP on footwear.

During adjudication, the company argued that the footwear from both units was identical, and the non-embossing at one unit was due to a non-functional embossing machine. The Commissioner acknowledged that the MRP of the footwear was below the prescribed limit but still confirmed the demand and imposed penalties due to the lack of embossing. The Tribunal noted that the absence of admissions or further investigations into past clearances led to assumptions by the Revenue regarding non-embossing. However, since the MRP was below the prescribed limit and visibly marked on outer packaging, the Tribunal found the demand excessive for a technical lapse.

Ultimately, the Tribunal granted a waiver of duty demands and penalties, emphasizing that the substantive condition of the exemption notification was met as the MRP was below the specified limit. The judgment highlighted the importance of ensuring compliance with conditions while considering technical lapses in enforcement actions, leading to a favorable outcome for the appellants in this case.