2018 (7) TMI 608 - AT - Central Excise

Valuation - PVC adhesive - impugned goods cleared to different states adopting different Retail Sale Price (RSP) values for each state - Section 4A of the Central Excise Act, 1944 - Held that - In terms of Explanation (b) under sub-rule (4) of Section 4A where different retail sale prices are declared on different packages for the sale of any excisable goods in packaged form in different areas, each such retail sale price shall be the retail sale price for the purposes of valuation of the excisable goods intended to be sold in the area to which the retail sale price relates - as long as the area to which such retail sale price relates is mentioned on the packages, different retail sale prices for different areas can be allowed. Wherever the appellants have used more than one MRP for a specific state, we hold the department s contention that highest of such MRP should be taken into account for charging the duty - looking into the fact that the appellants have accepted the duty liability of ₹ 3,53,148/- and Education Cess of ₹ 7,063/- and have paid it along with interest and have not raised any objection on the extended period involved in the show-cause notice, we find that the appellants are liable to pay duty of ₹ 3,53,148/- and Education Cess of ₹ 7,063/- along with interest and equivalent penalty under Section 11AC of the Central Excise Act, 1944. Appeal allowed in part.

Summary

Issues:
- Assessment of duty based on different Retail Sale Price (RSP) values for different states.
- Imposition of penalty under Section 11AC by the Department.
- Applicability of Maximum Retail Price (MRP) basis under Section 4A of the Central Excise Act, 1944.

Analysis:
1. The appellants cleared PVC adhesive to different states using varying RSP values. The Department demanded a sum and imposed a penalty under Section 11AC, arguing that the highest RSP should be adopted for assessment. The appeal was filed against the Order-in-Original and Order-in-Appeal confirming the demand.

2. The appellants did not appear but submitted written submissions. They explained that RSP differences were due to varied sales tax structures in states. They voluntarily paid a differential duty for cases where RSP differed within the same state. The appellants sought to set aside a portion of the duty, Education Cess, interest, and penalty.

3. The Departmental Representative supported the findings of the previous orders. The Tribunal examined the case and relevant legal provisions. The Explanation under Section 4A of the Act allows for different RSPs in different areas if mentioned on packages. For packages with multiple RSPs, the highest is considered the RSP. The Tribunal upheld the Department's stance on using the highest MRP for a specific state for duty calculation.

4. The Tribunal noted that the appellants had accepted a portion of the duty liability, paid it, and did not contest the extended period in the show-cause notice. Consequently, the appellants were held liable to pay the accepted duty amount, Education Cess, interest, and penalty under Section 11AC.

5. The appeal was partially allowed, setting aside a portion of the duty, Education Cess, and penalty imposed under Section 11AC. The final decision was pronounced in open court on the specified date.