2008 (12) TMI 66 - AT - Central Excise

Appellant has offered three packs of Shikakai soaps for the price of two packs valuation section 4A CEA - detachment of individual packs is easily possible without mutilating individual pack valuation should be done according to MRP on individual pack not according to price mentioned on pack of three - held that appellant s claim to discharge duty on three combined packs @ Rs. 24/- is not acceptable and held that appellant has to discharge duty @ Rs. 36/- for the pack of three soaps

Summary

Issues:
Assessment of duty on combined packs of 'Shikakai' brand soap, interpretation of Section 4A of The Central Excise Act, 1944, applicability of CBEC Circular No. 673/64/2002-CX, and compliance with valuation rules for multi-piece packages.

Analysis:
The appeals before the Appellate Tribunal CESTAT, MUMBAI involved the assessment of duty on combined packs of 'Shikakai' brand soap under Section 4A of The Central Excise Act, 1944. The appellants, engaged in manufacturing the soap on a job work basis, declared the MRP of three packs as Rs. 24/- as a special offer. The adjudicating authority held that duty should be discharged at Rs. 36/- for the pack of three soaps, less abatement. The main issue was whether the pack of three soaps should be assessed based on the MRP indicated on individual packs or the combined pack. The appellant argued that the packs were offered as a special deal of three for the price of two, supported by price declarations and literature. However, the Jt. CDR contended that individual packs had an MRP of Rs. 12/- each, and there was no clear indication that they were to be sold as a set of three. The tribunal considered the CBEC Circular No. 673/64/2002-CX, which clarified the valuation rules for multi-piece packages.

The tribunal noted that the actual disputed pack was unavailable, and based its decision on the records and lower authorities' findings. It was observed that the individual soap cakes were not marked to be sold as a pack of three, and the MRP printed on them was not mutilated. The tribunal referred to the CBEC circular, emphasizing that if individual items comprising a multi-pack are capable of being sold separately at the MRP printed on them, then the aggregate of the MRPs should be considered for duty payment. Since there was no contrary evidence to challenge the adjudicating authority's findings, the tribunal upheld the impugned orders, concluding that the appellant failed to make a case for interference. The appeals were rejected, and the cross objection filed by the revenue was disposed of accordingly.