2018 (6) TMI 75 - AT - Central Excise

Method of valuation - MRP based value or transaction value - Description of the goods - Classification - Applicability of section 4A to 'FINIT' cleared by Hindustan Petroleum Corporation Ltd - insecticides or mosquito repellants - scope of Notification issued under section 4A - Held that - Every product classified in 3808 10 of the Schedule of the Central Excise Tariff act, 1985 would not be liable to assessment under section 4A owing to the general nature of the said heading while the abatement notification is specific to mosquito repellants. Among the various goods classified under that heading, mosquito repellants are normally purchased by individual consumer while the other goods that may be classified therein have commercial application. The intent of the notification is to subject goods that require state intervention for protection of consumers to be taxed on the basis of printed price. That according to us, is the touchstone for determining the relevance of the valuation provision. - Decided against Revenue.

Summary

Issues:
1. Appeal against Order-in-Appeal confirming recovery of central excise duties and penalty imposition.
2. Dispute regarding the applicability of section 4A to 'FINIT' cleared by a company.
3. Interpretation of the goods covered by the notification under section 4A.
4. Analysis of the relevant legal provisions and previous judgments.
5. Assessment of whether 'FINIT' falls under the category of mosquito repellants.
6. Evaluation of the arguments presented by both parties.
7. Determination of the applicability of section 4A based on the nature of the goods.
8. Consideration of the intent behind the abatement notification and its relevance to the case.
9. Comparison with previous judgments and relevance to the current dispute.

Analysis:
The appeal was filed by Revenue against the Order-in-Appeal confirming the recovery of central excise duties and the imposition of a penalty. The dispute centered around the applicability of section 4A to 'FINIT' cleared by a company between September 2000 to February 2003. The issue arose from the description of the goods covered by the notification issued under section 4A, which the respondent argued was limited to mosquito coils, mats, and other repellants. The adjudicating authority, however, held that the product was not insecticides but mosquito repellants based on product literature and lexicon.

The Tribunal considered the arguments presented by both parties, with the Revenue relying on previous judgments and legal provisions to support their case. The Tribunal noted that the description of goods had been modified over time, and while all insecticides could act as mosquito repellants, the specific description in the notification did not apply to 'FINIT'. The Tribunal emphasized that not every product classified in the relevant heading would be liable under section 4A, especially considering the specific nature of mosquito repellants mentioned in the abatement notification.

Furthermore, the Tribunal highlighted the distinction between goods purchased by individual consumers, like mosquito repellants, and those with commercial applications. The intent behind the notification was to tax goods requiring state intervention for consumer protection based on printed prices. The Tribunal concluded that 'FINIT' was a mosquito repellant, and the appeal lacked merit as the product was not exclusively a mosquito repellant. The Tribunal dismissed the appeal, noting the failure to counter the findings of the first appellate authority, which contradicted the original authority's order.