2008 (5) TMI 137 - AT - Central Excise

Valuation - goods exported by the appellants to Bhutan - goods are instant noodles & cup noodles which are covered u/s 4A - Appellant submit that even if impugned goods are covered u/s 4A, there is no requirement to adopt the MRP valuation in respect of exported goods appellant s plea is acceptable in view of decision of Tribunal in the case of Gillette India Ltd. v. CCE, Jaipur therefore, valuation of goods exported to Bhutan can be done only under Section 4 and not Section 4A

Summary

Issues: Correct valuation of goods exported to Bhutan under Section 4A, maintainability of appeal before Commissioner (A) under Section 35E(2) of the Central Excise Act, reliance on Bhutanese Commodity Package Rules for valuation, requirement of affixing Maximum Retail Price (MRP) for exported goods, applicability of Standards of Weights and Measures Act for exported goods.

Analysis:

1. Maintainability of Appeal: The appeal was filed against Order-in-Appeal No. 112/2006-C.E. dated 25-10-2006 passed by the Commissioner of Central Excise, (Appeals-I), Bangalore. The appellant contended that the appeal should not have been taken up by the Commissioner (A) as per Section 35E(2) of the Central Excise Act, which mandates that only the adjudicating authority can be authorized for filing an appeal. Citing a Larger Bench decision, it was argued that the appeal was not maintainable before the Commissioner (A) since the Asst. Commissioner of Central Excise (Review) filed the appeal, not the original adjudicating authority.

2. Valuation of Exported Goods: The main issue revolved around the correct valuation of goods exported to Bhutan. The appellants exported instant noodles and cup noodles to Bhutan through a merchant exporter and claimed a refund of duty paid by mistake. The Commissioner (A) relied on Bhutanese Commodity Package Rules requiring affixation of MRP for valuation. The appellant argued that Bhutanese laws cannot be applied to them, as they are not subject to foreign laws. They contended that for goods exported to other countries, the Standards of Weights and Measures Act is not applicable, and there is no requirement to affix MRP. The Tribunal's decision in Gillette India Ltd. v. CCE Jaipur supported the argument that exported goods should be valued under Section 4, not Section 4A.

3. Applicability of Standards of Weights and Measures Act: The departmental representative argued that even for goods exported to Bhutan, valuation should be under Section 4A, as per Board's instructions and Rule 31 of the Standards of Weights and Measurement (Packaged Commodities) Rules. However, the appellant contended that there is no requirement to adopt MRP valuation for exported goods, as all goods exported from India are not subjected to MRP requirements. They argued that foreign laws cannot be read into Indian legislation and relied on circulars clarifying that Section 4A applies only when MRP is statutorily required.

4. Judgment: The Tribunal found that the appeal before the Commissioner (A) was not maintainable as it was filed by an authority other than the adjudicating authority. On the merits of the case, the Tribunal relied on the decision in Gillette India Ltd. v. CCE, Jaipur, and circulars clarifying the scope of Section 4A. The Tribunal held that the duty demands were not sustainable, and the valuation of goods exported to Bhutan should be done under Section 4, not Section 4A. Consequently, the impugned order was set aside, and the appeal was allowed with consequential relief for the appellant.