2017 (11) TMI 17 - AT - Central Excise

Valuation - section 4 or 4A - switch gears weighing more than 25 kg. each cleared to dealers - These switch gears have been assessed by the appellants under Section 4 ibid while the adjudicating authority held that these are liable to be assessed under Section 4A ibid as they were not directly sold to the industrial consumers - Held that - In terms of provision of Section 4A, only those commodities are required to be assessed under the Section, which are required to be affixed with MRP as per the provisions of Standards of Weights and Measures (Packaged Commodity) Rules, 1977 such required is not there in respect of certain categories of packaged goods - The investigation undertaken by the department has established that the appellants were selling all their switch gear product in packaged condition after repacking and labelling in their factory, after curing the same from their own other unit. The activity of packing/ repacking, labelling etc. on the impugned goods in their factory amounts to manufacture and in the present case are liable to duty in terms of Section 4A. Appeal dismissed - decided against appellant.

Summary

Issues:
Assessment under Section 4A for switch gears weighing more than 25 kg. sold to dealers.

Analysis:
The appellants manufactured switchgear falling under chapter heading 85.36, assessed based on MRP under Section 4A, except for switch gears over 25 kg. each sold to dealers. Adjudicating authority held these should be assessed under Section 4A, determining MRP based on list prices. Duty demand of ?45,37,620 for Jan to July 2008 was confirmed, leading to the current appeal.

The main contention was whether switch gears over 25 kg. each sold to dealers should be assessed under Section 4A. Rule 2A exempts packages over 25 kg. from MRP, but the goods were not sold by weight. The goods were sold through dealers, not directly to industrial consumers, thus not meeting the exemption criteria. The investigation revealed the goods were repacked and labeled in the factory, amounting to manufacture and falling under Section 4A.

The appellant cited case laws to support their argument, but the Tribunal remanded one case for adjudication and the others were not applicable to the current scenario. The judgments cited did not align with the facts of the case at hand. The observations made in the cases were in different contexts and not directly relevant to the issue at hand.

After considering the submissions and records, it was concluded that the impugned order was upheld. The switch gears over 25 kg. each sold to dealers were deemed assessable under Section 4A due to not meeting the exemption criteria specified in Rule 2A. The appeal was rejected, and the impugned order was upheld.