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2015 (12) TMI 1159 - SC - Central ExciseTransaction value u/s 4 or MRP based Valuation u/s 4A - sale of footwear to various buyers in retail as well as to various institutional buyers in bulk - Held that - CESTAT had recorded specific findings to the effect that the shoes in question which were supplied in packages to the aforesaid customers had MRP affixed on them. It was further found that clearances were not under Rule 34 of the Rules which exempts supplies of materials in bulk from the operation of Weights and Measures Act, meaning thereby it was obligatory and essential on the part of the respondent to affix MRP on the goods supplied. Once we find that the footwear is an item which is specified under Section 4A, which is covered by Weights and Measures Act and Rules, and MRP was affixed on the products supplied, which were not exempted under Rule 34 of the Rules, the provision of Section 4A of the Act shall stand attracted. Issue is no more res integra and has been elaborately dealt with by this Court in Jayanti Food Processing (P) Ltd. v. Commissioner of Central Excise, Rajasthan 2007 (8) TMI 3 - Supreme Court - There is no error in the judgment of the CESTAT - Decision in favour of assessee.
Issues:
1. Interpretation of Section 4A of the Central Excise Act, 1944 regarding valuation of goods sold to institutional buyers. 2. Application of Standards of Weights and Measures (Packaged Commodities) Rules, 1977 in determining the requirement to declare retail sale price. 3. Challenge to Show Cause Notices issued by the Revenue. 4. Assessment of excise duty, recovery, interest, and penalty imposed on the respondent. 5. Appeals against the orders by Adjudicating Authority and Commissioner. 6. Decision of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) on the appeal by the Revenue. Analysis: 1. The main issue in this case revolves around the interpretation of Section 4A of the Central Excise Act, 1944 concerning the valuation of goods sold by the respondent to institutional buyers. The Revenue argued that MRP should be the basis for valuation under Section 4A, while the respondent contended that for goods sold at a contract price, Section 4 should apply, not Section 4A. The dispute centered on whether affixing MRP on goods sold to institutional buyers constituted retail sale, thus attracting Section 4A. 2. The Revenue also relied on the Standards of Weights and Measures (Packaged Commodities) Rules, 1977 to support their argument. They contended that since goods sold to institutional buyers at a contract price were not intended for retail sale, there was no requirement to declare retail sale price. The rules specified that MRP should only be affixed for goods intended for retail sale, not for wholesale or bulk sales to institutional buyers. 3. The respondent was served with three Show Cause Notices based on the Revenue's allegations of evading excise duty by valuing goods incorrectly under Section 4A. The Adjudicating Authority confirmed the duty demanded in two orders, leading to recovery, interest, and penalty imposition on the respondent. 4. The assessment of excise duty, recovery, interest, and penalty imposed on the respondent was a significant aspect of the case. The Adjudicating Authority's orders were challenged by the respondent, leading to appeals and subsequent decisions by the Commissioner and CESTAT. 5. The Commissioner, in its Order-in-Appeal, set aside the demand proposed by the Adjudicating Authority, leading to further appeals by the Revenue. The CESTAT dismissed the Revenue's appeal, upholding the Commissioner's decision as being in conformity with the provisions of Section 4A of the Act. 6. The CESTAT's judgment highlighted that since footwear fell under Section 4A, and MRP was affixed on the products supplied to institutional buyers, the provision of Section 4A would apply. The CESTAT's decision aligned with previous legal interpretations and rulings, ultimately leading to the dismissal of the Revenue's appeals. The judgment emphasized the importance of correctly applying legal provisions and rules in determining the valuation and taxation of goods under the Central Excise Act.
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