2009 (4) TMI 253 - AT - Central Excise

Valuation applicability of Standards and Weights of Measures Act - respondent herein is clearing anti-dandruff shampoo and combining it with face wash gel revenue submit that process of combining anti-dandruff shampoo and the face wash gel would amount to manufacture so Standards and Weights of Measures Act is applicable and cost of goods given free to be included in total MRP - - Since it is undisputed that the face wash gel is supplied free by the respondent and the product anti-dandruff shampoo is covered under Section 4A of the Central Excise Act the provisions of Standards of Weights and Measures Act will be applicable and there will not be any duty liability on the face wash gel which is supplied free as the respondent had combined these two and cleared the same under one retail sale price. In view of this we do not find any merits in the appeal filed by the revenue. The appeal is rejected.

Summary

The Appellate Tribunal CESTAT, Bangalore, in the 2009 (4) TMI 253 - CESTAT, BANGALORE judgment, considered an appeal against an Order-in-Appeal concerning the manufacturing and sale of anti-dandruff shampoo combined with face wash gel. The revenue argued that this constituted manufacture under Chapter Note 4 of Chapter 33 and that the Standards and Weights of Measures Act should apply to the combination packages. The Adjudicating Authority upheld the demand, but the respondent successfully appealed this decision to the learned Commissioner (A). The Commissioner ruled in favor of the respondent, citing the CESTAT decision in the case of Surya Food and Agro Ltd. v. CCE, and held that the products were assessable under Section 4A and Standards of Weights and Measures Act. The Tribunal agreed with the Commissioner's decision and dismissed the revenue's appeal, finding no duty liability on the face wash gel supplied free with the shampoo.

The revenue disputed this decision, arguing that the Board's Circular on valuation of multi-piece packages did not apply, and that the issue was the levy of Central Excise duty on the face wash gel. They contended that previous CESTAT decisions were not relevant to the current case and that the face wash gel was an independent excisable good. The revenue also raised concerns about the cenvat credit taken by the respondents and the application of the Standards of Weights and Measures (Packaged commodities) Rules 1977.

Despite the absence of a respondent,, the Tribunal reviewed the arguments and upheld the Commissioner's decision. They reiterated that the combination of anti-dandruff shampoo and face wash gel amounted to manufacture and that the face wash gel, supplied free, was not subject to duty liability. The Tribunal rejected the revenue's appeal based on these findings. The judgment highlights the application of relevant laws and precedents in determining the duty liability of products sold in combination.