2016 (1) TMI 20 - AT - Central Excise

Method of valuation - Transaction value u/s 4 or MRP based value u/s 4A - manufacture and clearance of chocolates falling under chapter sub-heading 1801.00 individually weighing 3.9 gms and 14 gms. in separate pet jars for sale. - Held that - the issue is now squarely covered by the judgment of the Tribunal in the case of Swan Sweets Pvt. Ltd. 2006 (1) TMI 269 - CESTAT, MUMBAI wherein two appeals of the very same assessee were also allowed. - putting the individually small pieces into big jar would not make them liable to duty subject to MRP based duty. - Decided in favor of assessee.

Summary

Issues involved: Valuation of products cleared by the appellant under Section 4 vs. Section 4A of the Central Excise Act, 1944

Detailed Analysis:

1. Issue: Valuation of products cleared by the appellant.

- Facts: The appellant cleared dairy milk chocolates in containers and was assessed under Section 4 instead of Section 4A of the Central Excise Act, 1944. The Revenue argued that chocolates falling under sub-heading 1801.00 should be assessed under Section 4A. The appellant contested, stating the chocolates were below the weight threshold requiring MRP affixation.

- Legal Stand: The appellant relied on the Tribunal's judgment in Swan Sweets Pvt. Ltd. case, upheld by the Supreme Court in Commissioner of Central Excise vs. Makson Confectionary Pvt. Ltd., to support their position.

- Decision: The Tribunal found the issue covered by previous judgments, emphasizing that the products were sold in wholesale packages, not intended for retail sale, as per the definitions under the Rules. The Tribunal allowed the appeal, setting aside the impugned orders.

2. Judicial Precedents and Rulings:

- The Tribunal referred to the Swan Sweets Pvt. Ltd. case, where it was held that individual toffees in wholesale packages were not intended for retail sale, thus not attracting assessment under Section 4A of the Act.

- The Tribunal also cited the Cocoa Marketing & Processing Co-Op Ltd. case, which further supported the position that wholesale packages were not meant for retail sale, leading to a favorable decision for the appellant.

3. Appellate Proceedings:

- The Revenue's appeal against the Tribunal's decision was dismissed by the apex Court, affirming the Tribunal's judgment in favor of the appellant.

- The Tribunal, in line with previous decisions and apex Court rulings, held that the impugned orders were unsustainable and set them aside, allowing the appeals with consequential relief.

4. Conclusion:

- The Tribunal's detailed analysis of the issue, supported by legal precedents and rulings, led to a favorable outcome for the appellant. The judgment highlighted the distinction between retail and wholesale packages, emphasizing the correct valuation under the Central Excise Act, ultimately setting aside the impugned orders and granting relief to the appellant.