2017 (8) TMI 1160 - AT - Central Excise

Valuation - section 4A of the Central Excise Act 1944 - Air Conditioners - it is alleged that the price at which the goods are sold to customer does not include freight commission payable to dealers advertisement charges and charges for packing delivery forwarding etc; hence the M.R.P. printed on the containers of Air Conditioners cannot be subject to any abatement in terms of section 4A - Held that - CBEC Circular dated 28.02.2002 clarifies that the goods will be covered for assessment under section 4A in those cases where it is required in terms of Standards of Weights and Measures Act 1976 to declare on the package the retail price of such goods. The matter has also been settled in the case of Commissioner of Central Excise Panchkula Vs Liberty Shoes Ltd. 2015 (12) TMI 1159 - SUPREME COURT wherein it has been held that once the goods are specified under section 4A and are covered by Standards of Weights and Measures Act 1976 and Rules and not exempted u/r 34 of the Standards of Weights and Measures (Packaged Commodities) Rules 1977 and are supplied with MRP affixed on their production valuation u/s 4A ibid was proper. Appeal dismissed - decided against Revenue.

Summary

Issues:
Valuation under section 4 vs. section 4A of Central Excise Act, 1944 for Air Conditioners sold directly to consumers without intermediaries.

Analysis:
The appeal involved a dispute regarding the valuation of Air Conditioners under section 4 of the Central Excise Act, 1944, as opposed to section 4A, for units sold directly to consumers without intermediaries. The Revenue contended that the respondents had incorrectly adopted valuation under section 4A for Air Conditioners with capacity up to 3.0 TR, which were sold directly to consumers without intermediaries. The issue revolved around the interpretation of the term "Retail Sale Price" and whether the goods fell under the definition of 'Retail Sale' as per the Standards of Weights and Measures Act, 1975. The contention was that the goods should have been assessed under section 4 instead of section 4A due to the absence of various charges in the sale price.

The lower authority had passed an order confirming the duty demand and imposing penalties and interest under section 11 AC and section 11 AB of the Central Excise Act, 1944. However, the Commissioner (Appeals) set aside the demand, leading to the Revenue filing the present appeal. The key question was whether the Air Conditioners in question should be assessed under section 4 or section 4A of the Act.

In the impugned order, the Commissioner (Appeals) noted that the Air Conditioners fell under section 4A of the Act as per Notification No.13/2002-CE(NT), dated 01.03.2002. Referring to a CBEC Circular and various case laws, the Commissioner concluded that since the goods were covered by the notification, assessment should be under section 4A and not section 4. Moreover, the Commissioner cited a Supreme Court judgment in the case of Commissioner of Central Excise, Panchkula Vs Liberty Shoes Ltd., which upheld the valuation under section 4A for goods covered by the Standards of Weights and Measures Act, 1976 and supplied with MRP affixed on them.

Based on the Supreme Court's decision and the legal interpretations provided, the Appellate Tribunal upheld the impugned order, dismissing the Revenue's appeal. The judgment emphasized the importance of adhering to the provisions of the Standards of Weights and Measures Act and the relevant notifications in determining the appropriate valuation method under the Central Excise Act, 1944.