2019 (3) TMI 1223 - AT - Central Excise

Concessional rate of duty - Failure to mention / imprint MRP on Footwear - MRP between rs. 250 and 750 and above ₹ 750 - whether it is mandated that the goods be marked with the price? - N/N. 5/2006-CE dated 1st March 2006 - Held that - The footwear is covered within the ambit of the Rules and, in such circumstances, the contention that these are not required to be so marked or are exempt, is not relevant - the assessment should be under section 4A of Central Excise Act, 1944. Applicability of the notification - Held that - The notification itself is not restricted to the two categories enumerated but also a third category, viz., that of goods that are marked with a retail price of over ₹ 750/- per unit. The manner in which the entitlement to the exemption, or concession is to be extended is prescribed in the notification itself, i.e. by embossing or marking with indelible ink. It is not the case of the Learned Counsel for appellant that the goods were marked. Mere existence of the invoices submitted in routine will not suffice for restricting the demand to the normal period. It is on record that the appellant-company had filed returns but without indicating that the goods were not marked but affixed with stickers. The provisions of the notification are also crystal clear and it was incumbent upon the appellants to comply with the conditions therein. Imposition of penalty under section 11AC would not, therefore, suffer from illegality. The duty liability would be restricted to the tariff rate of 16% on the goods cleared without embossing or marking the maximum retail sale price of indelible ink subject to appropriate abatement - appeal allowed in part.

Issues:
Appeals against imposition of penalty under section 11AC and invocation of extended period for central excise duties, denial of concessional rate of duty, eligibility for concession based on retail price markings, valuation of goods under section 4 of Central Excise Act, applicability of notification no. 5/2006-CE, compliance with marking requirements, reliance on legal precedents, and imposition of penalty under section 11AC.

Analysis:

1. Invocation of Extended Period and Penalty under Section 11AC:
The appellant argued against the imposition of penalty under section 11AC, contending that the extended period from 2003-04 to 2006-07 should not have been invoked as all invoices were disclosed in 2002. However, the Authorized Representative countered, stating that the submission of invoices did not prevent the extended period invocation, alleging that the central excise authorities were misled in statutory returns. The tribunal upheld the penalty, restricting the duty liability to the tariff rate of 16% for goods cleared without proper retail price markings.

2. Denial of Concessional Rate of Duty:
The appellant claimed eligibility for a concessional rate of duty under notification no. 5/2006-CE, arguing that the retail price was marked on the footwear and PVC shoe molds. The tribunal considered the appellant's submissions and previous disputes, ultimately holding that the assessment should be under section 4A of the Central Excise Act, 1944, based on the Supreme Court's decision in Commissioner of Central Excise v. Liberty Shoes Ltd.

3. Valuation of Goods and Applicability of Notification:
The tribunal analyzed the applicability of the notification, emphasizing the requirement of marking goods with retail prices for concession eligibility. It was determined that the goods were affixed with stickers, not marked as per the notification's conditions, leading to the denial of the concession. The tribunal referenced legal precedents and specific case facts to support its decision, emphasizing compliance with notification conditions for duty benefits.

4. Compliance with Marking Requirements and Legal Precedents:
The tribunal scrutinized the compliance with marking requirements and legal precedents, emphasizing the need for proper embossing or marking of retail prices on goods for concession eligibility. The tribunal's decision was based on the lack of evidence of proper marking on the impugned goods, leading to the denial of the benefit of the notification and upholding the duty liability at the tariff rate of 16%.

5. Imposition of Penalty under Section 11AC:
The tribunal addressed the imposition of penalty under section 11AC, emphasizing the importance of complying with notification conditions and marking requirements. It was concluded that the penalty was justified due to the appellant's failure to adhere to the notification's provisions, leading to the partial allowance of the appeals with duty liability restricted to the tariff rate of 16% for goods without proper markings.

Overall, the tribunal's judgment focused on the compliance with statutory provisions, marking requirements, and legal precedents to determine the eligibility for concessional duty rates and the imposition of penalties under section 11AC. The decision highlighted the significance of adherence to notification conditions and proper marking of retail prices on goods for availing duty benefits, ultimately leading to a partial allowance of the appeals with duty liability adjustments.

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