2019 (7) TMI 632 - AT - Central Excise

Valuation - lubricating oils - gear oils - demand is based on the existence of advice on maximum retail price - section 4A of Central Excise Act, 1944 - period August 2005 and March 2006 - HELD THAT - Under section 4A of Central Excise Act, 1944, an assessee is required to clear the goods on application of prescribed rate of duty on the value arrived at after abatement of prescribed portion from the maximum retail price affixed on the product or on the packaging. The appellant, admittedly, did revise maximum retail price for their products but have claimed that the earlier production, lying in stock at the time of such revision, are cleared only at the price already printed on the product and, there being no additional consideration, was not violative of section 4A of Central Excise Act, 1944. On a perusal of section 4A of Central Excise Act, 1944, it is seen that the assessable value is deemed to be the retail price declared on such goods less such amount of abatement and that, under sub-section (4A)(4) of Central Excise Act, 1944, the consequence of ascertaining of the maximum retail sale price will arise only upon the removal without declaring the retail sale price or when declared retail sale price is tampered with, corrected by or altered from the one declared on the package at the time and place of removal. Appeal allowed - decided in favor of appellant.

Issues:
Challenge to order-in-appeal confirming duty liability, interest, and penalty imposition under section 11AC of Central Excise Act, 1944 for the manufacture of 'lubricating oils' and 'gear oils' based on maximum retail price affixed on containers.

Analysis:
The appellant contested the duty liability confirmed by the central excise authorities for goods cleared for retail sale between August 2005 and March 2006. The dispute revolved around the computation of duty based on the maximum retail price affixed on the containers. The authorities argued that the appellant should have calculated the liability based on the price advice issued during the period, rather than the lower prices on the labels. The appellant, however, maintained that the authorities wrongly disregarded their claim that the clearances were from old stock and that altering the sale price to higher than the printed labels was unlawful.

The appellant relied on previous tribunal decisions to support their argument, emphasizing that the extended period of limitation could not be invoked in disputes arising from audit records maintained by the assessee. The authorized representative for the respondent contended that the selling price at the retail level would align with the advice provided.

Upon thorough examination of the submissions and records, the Tribunal found that the demand was based on the existence of advice on the maximum retail price. The appellant had revised the maximum retail price for their products but clarified that the earlier production, cleared at the price printed on the product, did not violate the Central Excise Act, 1944. Notably, there was no evidence that the goods were sold at a higher price than indicated on the labels, and without such evidence, there was no provision for duty recovery.

The Tribunal highlighted that under section 4A of the Central Excise Act, 1944, the assessable value is deemed to be the retail price declared on the goods less the abatement amount. It emphasized that re-ascertainment of maximum retail sale price would only be relevant if the declared price was tampered with or altered at the time of removal. Consequently, the Tribunal set aside the impugned order and allowed the appeal, ruling in favor of the appellant.

This comprehensive analysis of the legal judgment from the Appellate Tribunal CESTAT MUMBAI provides a detailed insight into the issues raised, arguments presented, and the Tribunal's decision, ensuring a thorough understanding of the case.

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