2008 (11) TMI 99 - AT - Central Excise

Different MRPs for different buyers affixed revenue plea is that the highest MRP fixed on the like goods is to be adopted - Section 4A requires that where more than one retail price is declared, the maximum of such retail price shall be deemed to be retail sale price - It is not the Revenue s case that more than one MRP is affixed on same packet - as goods are sold at declared MRP even though the same may be different on each packet, such MRP is required to be adopted as assessable value

Summary

Issues:
Interpretation of Section 4A of the Central Excise Act, 1944 regarding the valuation of goods based on Maximum Retail Price (MRP) affixed on packages.

Analysis:
The judgment by the Appellate Tribunal CESTAT, Ahmedabad involved two appeals, one by the Revenue and the other by the assessee, both dealing with the interpretation of Section 4A of the Central Excise Act, 1944 for valuation purposes. The issue in both appeals was identical, concerning the adoption of the correct assessable value for duty payment based on the MRP affixed on goods. The Revenue contended that the highest MRP on like goods should be considered, while the assessee argued that the MRP fixed on the goods should be the correct assessable value. The Commissioner (Appeals) had ruled in favor of the assessee in one case and in favor of the Revenue in another.

In the case of M/s. Bell Granito Ceramica Ltd., the Commissioner (Appeals) accepted the assessee's argument that the MRP fixed on the goods should be the assessable value for duty payment, irrespective of different MRPs on different packages. The Tribunal supported this view, emphasizing that Section 4A does not require all packages to bear the same MRP, allowing manufacturers to affix different MRPs based on market conditions. The Tribunal highlighted that the purpose of Explanation 2 of Section 4A was to clarify the scenario where multiple MRPs are declared on packages.

Regarding the case of M/s. Savana Ceramics, the Commissioner (Appeals) upheld the Revenue's position that the maximum MRP fixed by the appellant should be considered as the correct retail sale price for duty calculation, as the appellant had cleared similar goods at different MRPs to the same party in the same area. However, the Tribunal's analysis emphasized that Section 4A does not mandate identical MRPs on all packets, as long as goods are sold at the declared MRP.

The Tribunal referred to previous judgments to support its interpretation, stating that fixing different MRPs on different packages based on the place of sale aligns with Section 4A provisions. The Tribunal reiterated that the retail price for excisable goods in packet form is the maximum price at which they are sold to consumers, and as long as sales are made at the declared MRP, Section 4A requirements are met.

In conclusion, the Tribunal rejected the Revenue's appeal and allowed the assessee's appeal, emphasizing that the MRP on each packet does not need to be identical as long as goods are sold at the declared MRP. The judgment clarified the interpretation of Section 4A and affirmed the manufacturer's prerogative to affix different MRPs based on commercial considerations.