2005 (12) TMI 7 - AT - Central Excise

(1) Lowered MRP in case of sale against exchange of old goods (2) Valuation of Woofer u/s 4 transaction value or 4A MRP

Summary

Issues:
Valuation dispute of Television sets under exchange scheme, Addition of value for old Television sets, Assessment based on Maximum Retail Price (MRP), Treatment of woofer as part of Television set, Confiscation and penalty on seized goods.

Valuation Dispute of Television Sets under Exchange Scheme:
The appeals and cross-objections were filed against the adjudication order related to the valuation of Television sets marketed by two manufacturers through an exchange scheme. The dispute revolved around whether the 'exchange price' should be considered as the Maximum Retail Price (MRP) for valuation purposes. The Revenue insisted on adding Rs. 4000 to the declared RSP, leading to subsequent show cause notices for assessments at higher prices based on market rates.

Addition of Value for Old Television Sets:
The main contention was whether the addition of Rs. 2000 to the RSP for sets sold under exchange scheme was adequate. The Revenue argued for an addition of Rs. 4500 based on market practices, while the respondent advocated for Rs. 2000 as the average value of old sets. The Commissioner accepted the proposal of adding Rs. 2000, considering it beneficial to revenue and providing a rational basis for assessment.

Assessment Based on Maximum Retail Price (MRP):
Both parties agreed before the Commissioner that the MRP of outright sale sets could be adopted for valuing sets sold under the exchange scheme. The Commissioner found that adding Rs. 2000 per set yielded the correct MRP, which was challenged by the Revenue. However, the Tribunal upheld the Commissioner's decision, stating that the addition of Rs. 2000 per set was sufficient for determining the correct MRP.

Treatment of Woofer as Part of Television Set:
The Revenue raised a grievance regarding the price of the woofer, contending that it should be included in the assessment under Section 4A. However, the Commissioner clarified that the woofer was not part of the Television set and should be valued separately under Section 4 of the Central Excise Act.

Confiscation and Penalty on Seized Goods:
The Revenue argued that seized goods should be liable for confiscation and the respondent for penalty due to incorrect valuation. However, the Tribunal found that full facts were disclosed by the appellant, and there was no intent to evade duty. Hence, confiscation and penalty were deemed not applicable, and the order of the Commissioner was confirmed.

In conclusion, the Tribunal rejected the appeals of the Revenue and the cross-objections of the respondent, upholding the order of the Commissioner related to the valuation dispute of Television sets under the exchange scheme, treatment of woofer, and the handling of seized goods.