2005 (11) TMI 3 - AT - Central Excise

MRP - Assessable value- Section 4A - Toilet soap was being sold earlier @ Rs.13.00 per cake. Under scheme of Rs. 1.50 off, MRP of Rs. 11.50 was printed on pack of soap

Summary

Issues:
1. Dispute over the assessable value of "Shikakai-3 in 1 Toilet Soap" product.
2. Allegation of under-valuation by the revenue due to a price reduction scheme.

Analysis:

Issue 1: Dispute over assessable value
The appeal filed by the revenue concerns the assessable value of the product "Shikakai-3 in 1 Toilet Soap" cleared by the respondents under a scheme offering a discount of Rs.1.50, with the maximum retail price set at Rs.11.50 per cake. The revenue argues that had the goods been sold without the scheme, the maximum retail price would have been Rs.13 per cake. Consequently, a show cause notice was issued for recovery of the differential duty. The Assistant Commissioner upheld the demand for duty and imposed a personal penalty. However, on appeal, the Commissioner (Appeals) noted that only one MRP of Rs.11.50 was indicated on the pack, and thus, accepted this declared MRP as the assessable value under Section 4A.

Issue 2: Allegation of under-valuation
The revenue contended that prior to the scheme, the appellants were selling the toilet soap at Rs.13 per cake, implying that the subsequent price reduction amounted to under-valuation. However, the Tribunal disagreed with this argument. As only one MRP was printed on the pack, the assessable value under Section 4A had to be determined based on this maximum retail price. The Tribunal emphasized that excise authorities cannot dictate the MRP, and there was no evidence to suggest that the goods were sold above the MRP set by the assessee. Consequently, the Tribunal found no merit in the revenue's appeal and rejected it.

In conclusion, the Tribunal upheld the decision of the Commissioner (Appeals) regarding the assessable value of the product "Shikakai-3 in 1 Toilet Soap," emphasizing the importance of the printed MRP in determining the value for excise duty purposes. The judgment clarifies that the MRP declared by the manufacturer is the relevant factor for assessment, and authorities cannot intervene to set a different value without evidence of overpricing.