2019 (1) TMI 900 - AT - Central Excise

MRP based Valuation or transaction value - manufacture of chewing tobacco which is being cleared in multi-piece packages - short payment of duty - Department alleged that chewing tobacco is an excisable commodity hence the provisions of Section 4A of the Act instead of Section 4 thereof shall apply - Held that - The issue herein is no more res integra. This Tribunal in Gupta Tobacco Company 2012 (1) TMI 247 - SUPREME COURT case has already held that chewing tobacco was not capable of being sold in numbers but were sold in weights of 6, 8 and 9 gram pouches. There is no requirement for MRP under SWM Rules. Chewing tobacco no doubt is chargeable to duty being classifiable under Chapter 2403-99-10 of Central Excise tariff Act, 1985 but there is no apparent Notification of the Government as is a mandate under Section 4A for the goods herein. Hence, Section 4A is not applicable upon the assesse. The retail packages in the present case were exempted from declaring the retail price being less than 10 grams in weight. There was no need for assesse to declare the price on the multi piece package which actually was a wholesale package. The wholesale package requires the declaration only about the name and address of the manufacturer/ packer, the identity of commodity contained in the package and the total number of retail packages contained in a wholesale package or the net quantity. Once there was no such requirement of declaring MRP, the question of valuation in accordance of Section 4A of the Act does not arise. Commissioner (Appeals) has rightly interpreted the provisions of the Act holding that Section 4A is not applicable to the given facts and circumstances no question of short payment, as alleged, at all arises - appeal dismissed - decided against Revenue.

Summary

Issues:
Challenge to Commissioner (Appeals) order allowing the assesse's appeal against demand for short payment of duty based on alleged misapplication of Section 4A of the Central Excise Act, 1944.

Analysis:
The Department contested the Commissioner (Appeals) order, arguing that the assesse failed to declare the retail sale price of multi-piece packages of chewing tobacco, necessitating duty assessment under Section 4A instead of Section 4 of the Act. The Department asserted that the duty was under-assessed, leading to short payment, and emphasized the importance of following the legal requirements for MRP declaration on packages.

In response, the assesse highlighted previous favorable decisions by the Tribunal and the Apex Court, emphasizing that individual packages under 10 grams were exempt from MRP declaration. The assesse argued that the multi-piece packages were wholesale packages not requiring MRP, and thus, the valuation under Section 4A was not applicable. The assesse maintained that no contravention of the Excise Act or Rules had occurred, negating the need for penalty imposition.

Upon review, the Tribunal considered the settled issue that chewing tobacco was sold in weights, not numbers, and exempt from MRP requirements under the SWM Rules. The Tribunal noted that the multi-piece packages were intended for intermediary sale, qualifying as wholesale packages exempt from MRP declaration. Citing various precedents, including decisions by the Tribunal and the Supreme Court, the Tribunal upheld the Commissioner (Appeals) interpretation that Section 4A did not apply in this case, dismissing the appeal and confirming the order.

In conclusion, the Tribunal's detailed analysis clarified that the multi-piece packages of chewing tobacco were wholesale packages exempt from MRP declaration, thus not falling under the purview of Section 4A for duty assessment. The Tribunal's decision aligned with previous legal interpretations and upheld the Commissioner (Appeals) order, dismissing the Department's appeal.