2023 (7) TMI 538 - AT - Central Excise

Method of Valuation - Section 4A or Section 4 of Central Excise Act, 1944? - sugar confectionery falling under chapter heading under 1704.90 and 1804.90 being manufactured by the appellant - the individual piece weighing less than 10 grams per piece and the same are packed in 500 grams pack - requirement of MRP based valuation or not. HELD THAT - In the identical facts in the appellant s own case SWAN SWEETS PVT. LTD. VERSUS COMMISSIONER OF C. EX., RAJKOT 2006 (1) TMI 269 - CESTAT, MUMBAI it was held that wholesale pack of 500 grams to 1 kg is not retail pack and therefore taking the weight of individual piece of confectionery which is less than 10 grams will not be governed under Section 4A - The said decision of the Tribunal was approved by the Hon ble Supreme Court COMMISSIONER OF CENTRAL EXCISE, RAJKOT VERSUS M/S MAKSON CONFECTIONERY PVT. LTD. 2010 (9) TMI 10 - SUPREME COURT . This Tribunal considering the decision in the case of Makson Pharmaceuticals India Pvt. Ltd taking the same view decided the matter in the favour of the assessee in MAKSON PHARMACEUTICALS (I) PVT LTD VERSUS C.C.E. S.T. -BHAVNAGAR (VICE-VERSA) 2023 (5) TMI 385 - CESTAT AHMEDABAD . The issue is no longer res- integra, therefore, the impugned order is not sustainable - Appeal allowed.

Summary

Issues involved:
The issue in this case revolves around the valuation of sugar confectionery falling under specific chapter headings and being packed in 500 grams packs, with individual pieces weighing less than 10 grams each. The question is whether such products should be valued on the Maximum Retail Price (MRP) basis under Section 4A or under Section 4 of the Central Excise Act, 1944.

Valuation Basis - Section 4 vs. Section 4A:
The appellant argued that previous judgments, including one by the Hon'ble Supreme Court, supported their position that such goods should be valued under Section 4 and not Section 4A of the Central Excise Act, 1944. The Tribunal referenced a previous decision in the appellant's own case where it was held that individual confectionery pieces weighing less than 10 grams do not fall under Section 4A. This interpretation was further supported by Rule 34(b) of the Standards of Weights and Measures (Packaged Commodities) Rules, 1977, which exempts products weighing less than 10 grams from the requirement of affixing retail sale prices. The Tribunal concluded that the law laid down by the Hon'ble Supreme Court in the appellant's case remained applicable, dismissing the revenue's appeal.

Application of Section 11D - Duty Collection:
Regarding the confirmation of demand under Section 11D, the Tribunal found that although the appellant had initially raised invoices showing duty under Section 4A, they had issued credit notes for the differential duty amount to customers, indicating that the amount was not collected. Section 11D applies when duty is collected but not deposited with the government, which was not the case here. As a result, the demand confirmed under Section 11D was deemed unsustainable, and the appellant's appeal was allowed.

Conclusion:
Based on the judgments and legal provisions cited, the Tribunal dismissed the revenue's appeal and allowed the appellant's appeal. The impugned order was set aside, and the appeals were allowed in favor of the appellant.