2003 (11) TMI 89 - HC - Central Excise

Valuation (Central Excise) - MRP based valuation - Validity of Circular No. 492/58/99-CX dated 2-11-99 issued by the Central Board of Excise and Customs - HELD THAT - The purport of the present circular is not to lay down any guideline or rule relating to any matter covered under the Act or the Rules made thereunder. The purport of the impugned circular is to issue clarification in the matter relating to manner of levying excise in respect of articles. The purpose is to bring unity in the classification of excisable goods or with respect to levy of excise on those goods and not to issue any general direction or rule in respect of the matters covered under the Act or the Rules made thereunder. A perusal of the provisions makes it clear that articles kept in separate pouches by the petitioner can be termed as multi piece package and such pouches can be sold individually in single piece or together in a mono-carton of six pouches. The contention of the petitioner that exemption under Rule 34 would be applicable is not acceptable. Even though the net weight is less than 10 grams, it is evident that article is not intended to be sold either by weight or by measure as contemplated under Rule 34(b). The contention that clarification issued by the respondent No.1 has the effect of whittling down the exemption granted u/s 34 is not at all acceptable. Thus, I do not find any merit in this writ petition, which is accordingly dismissed. There shall be no order as to costs. Consequently, the connected miscellaneous petitions are closed.

Summary

Issues:
The petitioner sought a declaration that Circular No. 492/58/99-CX dated 2-11-99 issued by the Central Board of Excise and Customs was null and void, alleging it contravened various constitutional provisions and statutory laws.

Manufacture of Herbal Hair Dye:
The petitioner, engaged in manufacturing herbal hair dye falling under Chapter sub-heading 3305.99 of Central Excise Tariff Act, 1985, was assessed based on wholesale price under Section 4(1)(a) of the Central Excise Act, 1944. The introduction of Section 4A of the Act by the Central Government led to a dispute regarding the valuation of excisable goods with reference to retail sale price.

Validity of Circular and Jurisdiction:
The petitioner contended that the impugned circular exceeded the jurisdiction under Section 37B of the Central Excise Act, 1944 and encroached upon the provisions of the Standards of Weights and Measures Act and Rules made thereunder, particularly Rule 34 regarding exemptions.

Contentions and Counter-Arguments:
The petitioner's arguments challenging the circular were refuted by the respondents in their counter. The circular clarified the assessment of excise duty for multi-piece packages intended for retail sale, invoking Section 4A of the Central Excise Act, 1944.

Legal Provisions and Definitions:
Section 4A of the Central Excise Act pertains to the valuation of excisable goods with reference to retail sale price, specifying conditions and considerations for such valuation. Rule 17 of the Standards of Weights and Measures (Packaged Commodities) Rules, 1977 mandates additional declarations on multi-piece packages, including retail sale price.

Interpretation and Dismissal of Petition:
The Court analyzed the statutory provisions and definitions related to packaged commodities and multi-piece packages. It concluded that the petitioner's products qualified as multi-piece packages, rejecting the contention that the circular undermined the exemption under Rule 34. The writ petition was dismissed for lack of merit, with no costs awarded.

Conclusion:
The Court found no substance in the petitioner's challenge to the circular, ruling against the petitioner and closing the related miscellaneous petitions without costs.