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2016 (12) TMI 1262 - AT - Central ExciseValuation - transaction value or MRP based value - P.P. Medicines - bulk supply to institutional consumers like Hospitals - Intention to evade duty - Held that - Para 6 of Circular No.625/16/2002-CX dated 28.02.2002 issued by Central Board of Excise and Customs clarified that in respect of all goods (whether notified under Section 4A or not) which are not statutorily required to declare the retail sale price on the packages under the provisions of the standards of Weights and Measures Act, 1976, or the Rules made thereunder valuation shall be done under Section 4 of Central Excise Act, 1944 and also stated that thus, there could be instances where same notified commodity would be partly assessed on the basis of MRP under Section 4A and partly on the basis of normal price i.e. transaction value under Section 4 of the said Act - the appellant have followed the Circular dated 28.02.2002 issued by CBEC, therefore, intention to evade payment of duty has not been established - Appeal allowed - decided in favor of the assessee.
Issues involved:
Interpretation of provisions of Section 4A of Central Excise Act, 1944; Application of Circular No.625/16/2002-CX dated 28.02.2002 by CBEC; Invocation of proviso to Sub-Section 1 of Section 11A of Central Excise Act, 1944. Interpretation of Section 4A: The appeal involved the interpretation of Section 4A of the Central Excise Act, 1944, concerning the appellant's manufacturing of P.P. Medicines. The goods in question fell under Chapter Heading 3003 of the Schedule to the Central Excise Tariff Act, 1985, and were covered by a notification issued under Sub-Section 1 of Section 4A. The appellant cleared these goods to institutional consumers like Hospitals, paying duty based on the value determined under Section 4 of the Act, despite the goods being specified under Section 4A. A show cause notice was issued, demanding Central Excise duty and penalty, which was confirmed in the Order-in-Original. The appellant appealed against this order, leading to the present Tribunal hearing. Application of Circular No.625/16/2002-CX: The appellant argued that Circular No.625/16/2002-CX dated 28.02.2002 by CBEC clarified that for goods not required to declare the retail sale price on packages under the Weights and Measures Act, valuation should be done under Section 4 of the Central Excise Act, 1944. They contended that they followed this circular and were not obligated to declare retail sale prices on the packets covered by the invoices in question. The Circular allowed for assessment based on MRP under Section 4A and normal price under Section 4, leading to a partial assessment based on transaction value. The appellant maintained that they acted in accordance with the circular, had no intention to evade duty, and brought this to the attention of the authorities. Invocation of proviso to Sub-Section 1 of Section 11A: The Tribunal examined the show cause notice issued under the proviso to Sub-Section 1 of Section 11A of the Central Excise Act, 1944, which requires the establishment of an intention to evade duty. Considering the appellant's adherence to the Circular dated 28.02.2002 issued by CBEC, the Tribunal found that the intention to evade payment of duty was not established. Consequently, the Tribunal held that the impugned show cause notice was not sustainable due to the lack of proof of intent to evade duty, leading to the setting aside of the Order-in-Original and Order-in-Appeal, with the appeal being allowed and the appellant entitled to consequential relief.
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