2005 (8) TMI 222 - AT - Central Excise

Summary

Issues: Valuation of export consignments under Section 4 or Section 4A of the Central Excise Act

1. The case involves a manufacturer of razors and razor blades in India, exporting a part of the produce to Nepal, paying excise duty on export consignments based on export sale prices, and facing a dispute on the valuation of export goods under Section 4 or Section 4A of the Central Excise Act.

2. The Senior Counsel for the appellant argues that Section 4A applies only when goods are statutorily required to be marked with maximum retail price (MRP), pointing out that export goods are outside the purview of MRP marking requirements. The Rules under the Standards of Weights and Measures Act specifically exclude export consignments from the MRP marking obligation.

3. The learned SDR contends that the export consignments should be valued under Section 4A based on the supplementary instructions of the Central Board of Excise and Customs, which state that export goods to Nepal should be assessed to duty in the same manner as goods for home consumption, implying valuation under Section 4A.

4. The Appellate Tribunal analyzes the legal provisions of Section 4 and Section 4A of the Central Excise Act, emphasizing that Section 4 is the main section for valuation of goods, while Section 4A constitutes an exception for specified goods required to declare MRP. The Tribunal concludes that since export goods are exempt from MRP marking requirements, valuation of export consignments cannot be under Section 4A.

5. The Tribunal further examines the supplementary instructions of the Board, noting that they also contemplate assessment under transaction value conforming to Section 4 or Section 4A. It finds that the transaction value in the present case aligns with Section 4, with no challenge to the commercial price of exports, and the Board's instructions are consistent for goods exported to other countries.

6. Considering the provisions of Section 4A and the potential implications of applying it to export consignments, the Tribunal highlights that exporters would face confiscation risks if MRP is not declared, making exports difficult. Referring to circulars clarifying the scope of Section 4A, the Tribunal concludes that Section 4A applies only when MRP is statutorily required, supporting the appellant's position.

7. Ultimately, the Tribunal rules that the duty demands in the impugned orders are not sustainable, setting them aside and allowing the appeals in favor of the appellant, with consequential relief if applicable.