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2017 (2) TMI 59 - AT - Central ExciseValuation - MRP based valuation - inclusion of value of accessories of Kenstar Food Processors cleared separately in separate packages to the purchasers - It is contention that what they have cleared as Kenstar Food Processors is a self-contained electric motor having the functions of mixer grinder with additional facility of food processor along with attachments, hence subjected to MRP based assessment. But, when Kenstar Food Processors accessories are cleared, in a separate package, it is without any self-contained electric motor, hence, the same is subjected to assessment under Section 4 of CEA, 1944 - Rule 26 of Central Excise Rules,1944 - Circular No.625/16/02-CX dated 28.2.202 Held that - On a plain reading of the aforesaid provision it reveals that Section 4A would be applicable to manufactured goods chargeable to ad valorem rate of duty and the main condition necessary for attracting the said provision is that the goods specified thereunder, is required under the provisions of Standards of Weights and Measurement Act, 1976 or Rules made there under to declare on the package thereof, the retail sale price of such goods - We are of the view that the requirement of affixing MRP on the retail package of Kenstar Food Processors Accessories be referred to Metrology Department seeking their opinion as to whether the appellants are required to affix MRP on the package containing Kenstar Foods Processors Accessories when the Kenstar Food Processors and the Accessories are cleared in separate packages. In the result, the impugned Order is set aside and the appeals are remanded to the ld. Commissioner for deciding the issue afresh after obtaining the necessary opinion from the Legal Metrology Department in this regard.
Issues Involved:
1. Valuation of Kenstar Food Processors and its accessories under Section 4A or Section 4 of the Central Excise Act, 1944. 2. Requirement of affixing MRP on the retail package of Kenstar Food Processors Accessories. 3. Applicability of Standards of Weights and Measures (Packaged Commodities) Rules, 1977. 4. Limitation period for issuing the demand notice. Detailed Analysis: Issue 1: Valuation of Kenstar Food Processors and its accessories under Section 4A or Section 4 of the Central Excise Act, 1944 The appellants, M/s Canbara Industries, argued that Kenstar Food Processors were correctly valued under Section 4A of the CEA, 1944, based on the MRP affixed on retail packages. However, the accessories, cleared separately, were assessed under Section 4 of the CEA, 1944, based on the transaction value. The Revenue contended that both the food processors and their accessories should be assessed under Section 4A, as they are advertised together and functionally interdependent. The Tribunal noted that the core issue is whether the accessories, when cleared separately, should be valued under Section 4A or Section 4. Issue 2: Requirement of affixing MRP on the retail package of Kenstar Food Processors Accessories The Tribunal emphasized that Section 4A applies only if the goods are required to declare the retail sale price under the Standards of Weights and Measurement Act, 1976, or the rules made thereunder. The CBEC Circular No. 625/16/2002-CX dated 28.02.2002 clarified that if there is no statutory requirement to affix MRP, the goods should be assessed under Section 4. The Tribunal referred to the Supreme Court judgment in Jayanti Food Processing Pvt. Limited v. C.C.E., Rajasthan, which supported this interpretation. Issue 3: Applicability of Standards of Weights and Measures (Packaged Commodities) Rules, 1977 The Tribunal highlighted the definitions of "retail package" and "wholesale package" under the Standards of Weights and Measures (Packaged Commodities) Rules, 1977. It concluded that the necessity of affixing MRP on Kenstar Food Processors Accessories should be determined by the Legal Metrology Department. The Tribunal directed the Commissioner to obtain an opinion from the Metrology Department on whether the accessories, when cleared separately, require MRP declaration. Issue 4: Limitation period for issuing the demand notice The appellants argued that the issue involved a pure question of law and no facts were suppressed, thus the demand was barred by limitation. The Tribunal did not explicitly address this argument, focusing instead on the primary issue of valuation and the requirement of MRP declaration. Conclusion: The Tribunal set aside the impugned order and remanded the matter to the Commissioner for fresh adjudication after obtaining an opinion from the Legal Metrology Department regarding the necessity of affixing MRP on the retail packages of Kenstar Food Processors Accessories. The Tribunal directed that the matter be decided within four months from the date of communication of the order, ensuring a reasonable opportunity of hearing for the appellants. All issues were kept open for reconsideration based on the outcome of the Metrology Department's opinion.
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