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2018 (1) TMI 1014 - AT - Central ExciseValuation - MRP Based Valuation - main allegation raised is that for the goods having same quality and quantity, the appellants have affixed different MRP for the distribution / supply in the same area - The defence taken by the appellant is that different MRP was affixed on the goods supplied in the same area because the supply was made to distinct class of buyers. Held that - The basic feature of the MRP valuation is to have uniform pricing for the purpose of assessment for same kind of goods of manufacturer. The Central Excise Act, 1944 has adopted these provisions from the SWM Act and (PC) Rules in order to have uniformity in pricing as well as for discharging the duty. If the goods are supplied to institutional buyers and not intended for retail sale, it is not necessary for the appellant to affix the MRP. However, they have affixed MRP and discharged the duty under section 4A. The appellant asserts that they have discharged duty on the higher value of ₹ 70/- even though these regular packs were sometimes supplied to institutional buyers. It is not clear whether such duty has been discharged - The matter requires verification as to whether the appellant has been supplying goods to two distinct classes of consumers and whether duty has been discharged for the clearances. Appeal allowed by way of remand.
Issues Involved:
1. Change of cause title from Commissioner of Central Excise, Chennai II to The Principal Commissioner of Central Excise, Chennai I. 2. Legality of affixing different MRPs for the same product in the same area. 3. Determination of whether the differential duty demand and penalties imposed were justified. Issue-wise Detailed Analysis: 1. Change of Cause Title: The Revenue filed miscellaneous applications seeking to amend the cause title from Commissioner of Central Excise, Chennai II to The Principal Commissioner of Central Excise, Chennai I, due to the revision of Commissionerates as per Notification No. 27/2014-CE (NT) dated 16.9.2014. After hearing both sides, the Tribunal allowed the miscellaneous applications and permitted the amendment of the cause title accordingly. 2. Legality of Affixing Different MRPs: The primary issue was whether M/s. SR Mineral Water Pvt. Ltd. (SRM) could legally affix different MRPs (?50 and ?70) on the same product (25 liters of KINLEY packaged drinking water) sold in the same area. The Preventive Unit of Central Excise observed that despite the same quality and quantity, SRM declared different MRPs on institutional packs (?50) and regular packs (?70). The department alleged that the introduction of the ?50 MRP was to benefit the distributor, M/s. SR Water, by providing them with a higher margin, and not due to market demand. The appellants argued that different MRPs for distinct classes of buyers (institutional and regular) were permissible under the Standards of Weights and Measures (Packaged Commodities) Rules, 1977 (SWM (PC) Rules). They contended that the institutional packs were not intended for retail sale and thus, the lower MRP of ?50 was justified. 3. Differential Duty Demand and Penalties: The original authority confirmed the differential duty demand, holding that the declared RSP of ?70 should be applied to both regular and institutional packs. This decision was based on the observation that the goods were of the same quality and quantity and were sold in the same area. The appellants were penalized, and M/s. Hindustan Coca Cola Beverages (HCCB) was also fined for abetting SRM. The appellants challenged this, arguing that they had complied with the legal requirements by affixing the appropriate MRPs and paying the excise duty accordingly. Tribunal's Findings: The Tribunal noted that the main allegation was the affixing of different MRPs for the same goods in the same area, which is contrary to Explanation (c) of Section 4A of the Central Excise Act, 1944. The Tribunal acknowledged that under Rule 34 of the SWM (PC) Rules, 1977, goods supplied to institutional buyers need not have an MRP affixed if not intended for retail sale, and duty should be discharged based on transaction value under Section 4 of the Central Excise Act. However, the show cause notice did not allege this, focusing instead on the different MRPs. The Tribunal found it necessary to verify whether SRM supplied goods to two distinct classes of consumers (institutional and regular) and whether the appropriate duty was discharged for these clearances. Therefore, the Tribunal set aside the impugned orders and remanded the matter to the adjudicating authority for reconsideration, keeping all issues open for re-examination. Conclusion: The appeals were allowed by way of remand to the adjudicating authority for further verification and reconsideration of the issues, particularly focusing on whether the appellants supplied goods to distinct classes of consumers and discharged the appropriate duty. The operative portion of the order was pronounced in open court.
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