2019 (8) TMI 1691 - AT - Central Excise

Classification of goods - Ayurveda Power Prash and Ayurveda Advanced Herbal Body Growth - to be valued under MRP basis or not - SSI exemption limit crossed or not - period 1 April, 2011 to 24 November, 2011 which is prior to 1 March, 2013 - HELD THAT - In Devendra Arora, Prop. 2018 (5) TMI 1190 - CESTAT NEW DELHI , this very issue was examined and the Bench observed that it was with effect from 1 March, 2013 that not only the classical Ayurvedic medicines but also Ayurvedic Power Prash and Ayurvedic Advance Herbal Body Growth would be included in the notification for charging duty under Section 4A of the Excise Act. There are no justification for the adjudicating authority to assess the goods under Section 4A of the Excise Act. Therefore, the seizure made by the Department is not sustainable and is liable to be set aside - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Confiscation of seized goods under Rule 25 of Central Excise Rules, 2002
2. Imposition of penalty under Rule 25 of Excise Rules
3. Applicability of Maximum Retail Price (MRP) on manufactured goods
4. Classification of products under Tariff Heading No. 30039011
5. Dispute on assessment basis - MRP vs. transaction value
6. Interpretation of Notification No. 49/2008-CE (NT) and subsequent amendments

Confiscation of Seized Goods and Penalty:
The appeal challenged the Order-in-Appeal upholding the confiscation of goods valued at ?27,55,950 under Rule 25 of Central Excise Rules, 2002, with an option to redeem on payment of ?1,42,000. The penalty of ?1,42,000 was also imposed. The Appellant, M/s Ishguru Hitech Care Products, was engaged in manufacturing Ayurvedic products and was registered with the Central Excise Department. The search by Directorate General of Central Excise revealed sales of products above MRP, leading to the seizure and subsequent adjudication.

Applicability of Maximum Retail Price (MRP) and Classification:
The main dispute revolved around the applicability of MRP on the manufactured goods and their classification under Tariff Heading No. 30039011. The Appellant argued that the goods should be assessed on transaction value under Section 4 of the Central Excise Act, not MRP. The Tribunal referred to a previous decision and noted that the goods were not subject to MRP assessment before March 1, 2013, as per relevant notifications.

Dispute on Assessment Basis and Notification Interpretation:
The Tribunal analyzed Notification No. 49/2008-CE (NT) and its amendments regarding the assessment basis for Ayurvedic products. The dispute focused on whether Ayurvedic medicaments, including Patent and Proprietary (P&P) products, were subject to MRP assessment before March 1, 2013. The Tribunal concluded that prior to this date, P&P Ayurvedic medicines were not included in MRP assessment, setting aside all demands before March 1, 2013.

In conclusion, the Tribunal set aside the impugned order, ruling in favor of the Appellant due to the absence of justification for assessing goods under Section 4A of the Excise Act before March 1, 2013. The seizure was deemed unsustainable, and the appeal was allowed with consequential benefit to the Appellant.