2018 (4) TMI 1386 - AT - Central Excise

Method of valuation - section 4 or section 4A of CEA, 1944 - Baking powder - Vanila powder - Custard powder - bakery mixes and chocolate improver. Held that - CBEC Circular dated 28.2.2002 held that since the concerned State Government authority had already held that the provisions of Standard of Weights & Measures Act, 1976 and the Rules made thereunder were inapplicable to the goods in dispute, there was no warrant or justification for valuing the goods under Section 4A of the Central Excise Act, 1944 The only basis on which Show Cause Notices were issued in the present case, insofar as the issue on valuation was that Section 4 of the Central Excise Act, 1944 did not apply and instead, Section 4A applies - since Section 4A is inapplicable and determination of value has to be done under Section 4, there is nothing in the matter which needs further examination. If the Revenue was aggrieved by the judgment of the Hon ble Bombay High Court, it ought to have challenged the judgment before the Hon ble Supreme Court, which it had not done. Appeal dismissed - decided against Revenue.

Summary

Issues:
1. Classification of products under Central Excise Act, 1944.
2. Valuation of goods under Section 4A vs. Section 4 of the Central Excise Act, 1944.

Classification Issue:
The appeal filed by the Revenue questioned the classification of products such as baking powder, vanilla powder, custard powder, bakery mixes, and chocolate improver by the assessee under CSH 2102.90 and 2108.99. The Revenue contended that these products should be assessed based on the printed MRP under Section 4A of the Central Excise Act, 1944, while the assessee argued for assessment under Section 4 of the Act. The respondent's claim was supported by a Final Order of the Tribunal in a previous case, which the Revenue had accepted by not appealing against it.

Valuation Issue:
The dispute on valuation arose as the Revenue demanded duty from the respondent for misclassifying products and valuing them under Section 4 instead of Section 4A of the Central Excise Act, 1944. The respondent argued that the Standard of Weights & Measures Act, 1976, did not apply to the goods in question due to their packaging in large bags exempted from MRP printing requirements. The respondent cited a CBEC Circular and orders from the Food & Civil Supplies Department of Maharashtra, which supported their exemption claim. The Commissioner (Appeals) ruled in favor of the respondent, emphasizing the State Government's authority in interpreting the Weights & Measures Act. The Revenue challenged this decision, but the Tribunal dismissed the appeal, noting that the Revenue had not challenged the State Government's orders in the High Court and that the issue of valuation under Section 4A was deemed inapplicable based on the High Court's judgment.

In conclusion, the Tribunal's judgment focused on the valuation issue, highlighting the Revenue's failure to challenge the State Government's orders in the High Court, leading to the inapplicability of Section 4A for valuation. The Tribunal dismissed the Revenue's appeal, emphasizing that the matter had been settled by the High Court's decision and that no further examination was required.