2018 (6) TMI 1415 - AT - Central Excise

Method of Valuation - Section 4 or Section 4A of CEA - Appellant defaced and removed brand name MILTON from insulated wares and sold them as loose articles in bulk - Held that - There is no dispute about the facts that the goods were sold in loose form after defacing / removing the brand name of Milton from such insulated wares. The appellants as per the conditions of NOC issued by M/s. Milton had removed all the brand name/ logo/ marking and packing which could identify the product with M/s Milton. In such case the appellant was not liable to clear the goods by affixing MRP as the same were not in packed form and the requirement under SWMA, 1976 was not applicable to the appellant. Valuation u/s 4 of CEA is applicable - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Applicability of Section 4A of CEA, 1944 to the clearance of goods.
2. Interpretation of Standard Weights and Measure Act, 1976 in relation to the goods clearance.
3. Liability to declare MRP on products cleared in loose form without brand name and retail packing.
4. Effect of defacing/removing brand name from goods on duty liability.
5. Application of legal precedent in determining duty liability.

Analysis:

1. The case involved the appellant, engaged in manufacturing insulated wares cleared under the brand name "MILTON" under Section 4A of CEA, 1944. The appellant discontinued manufacturing in 2001 and subsequently sold the remaining stock in loose form after defacing the brand name. The issue was whether Section 4A valuation applied to these goods.

2. The appellant argued that since the goods were sold in bulk without brand name or retail packing, they were excluded from the scope of Standard Weights and Measure (Packaging Commodity) Rules 1977. The contention was that Section 4A applied only to goods notified under it and required MRP declaration for packed products under SWMA, 1976.

3. The revenue authority relied on the Supreme Court judgment in JAYANTI FOOD PROCESSING case, emphasizing the duty liability. However, the appellant maintained that the defaced goods sold in loose form did not fall under the SWMA, 1976 requirements, hence not subject to Section 4A valuation.

4. The Tribunal examined the facts and found that the goods were sold without the Milton brand identification as per the NOC conditions. Consequently, the Tribunal held that since the goods were not in packed form and did not require MRP declaration, Section 4A valuation was inapplicable. Citing the JAYANTI FOOD PROCESSING case, the Tribunal ruled in favor of the appellant, setting aside the impugned order and allowing the appeal.

5. The Tribunal's decision was based on the interpretation of the law and the specific circumstances of the case, aligning with the legal precedent established in the JAYANTI FOOD PROCESSING case. The judgment emphasized the importance of the goods' form and branding in determining duty liability under Section 4A of CEA, 1944.

This detailed analysis of the judgment highlights the key issues, arguments presented by both parties, legal interpretations, and the Tribunal's decision based on the facts and applicable legal principles.