2024 (12) TMI 345 - AT - Central Excise

Determination of the Retail Price - Central Excise duty on the Retail Price declared on the goods less such abatement - goods were sold at prices higher than the Retail Price declared on the goods - HELD THAT - It is seen that Rule 4 nowhere provides for adopting a MRP indicated in a Price List but requires ascertainment of the RSP which is either declared on identical goods removed within a period of one month or the RSP in the retail market at which the goods are actually sold at or about the time of removal of such goods from the place of manufacture. The said Price List relied upon in the notice, itself under Terms and Conditions, at Sr. No.7 mentions that Prices therein are subject to revision without prior notice and ruling prices will be charged at the time of dispatch. The same therefore does not represent the actual retail price at which the goods are sold. Moreover, the requirement is to ascertain the actual RSP at or about the time of removal of the goods to be valued. Therefore, a Price list of Feb 2005 cannot in any event be uniformly applied through out the period from 2005 to 2009. It is settled law as laid down in CCE v Bell Granito Ceramics Ltd 2008 (11) TMI 99 - CESTAT, AHMEDABAD , that there is no requirement under Section 4A that the MRP on each package of goods has to be identical. Accordingly, a manufacturer can affix different MRPs on different packages of the same kind of goods. If the MRP on a given package has to be rejected under Section 4A (4) and redetermined under Rule 4 of the said Rules of 2008, then with regard to every package, it would be necessary to ascertain the actual RSP in the retail market at or about the time of removal of the package in question. An MRP indicated in a Price list of Feb 2005, which itself mentions that Prices therein are subject to revision without prior notice and ruling prices will be charged at the time of dispatch cannot be applied across the board for clearances made from 2005 to 2009. It is further noticed that the Larger Bench of this tribunal in the case of Ocean Ceramics Ltd v CCE 2024 (1) TMI 1280 - CESTAT AHMEDABAD - LB , has held that in absence of the manner of ascertainment of RSP having being prescribed by Rules under Section 4A (4) for the period prior to 1-3-2008, it is not open to the adjudicating authority to ascertain the RSP for the period prior to 1-3-2008 and that the Central Excise (Determination of Retail Sale Price of Excisable Goods) Rules 2008 notified with effect from 1-3-2008 cannot apply retrospectively for the period prior to 1-3-2008, in that view, we find that the demand for the period prior to 1-3-2008 based on the ascertainment done in the impugned Order-in-Original is in any way not tenable. The impugned Order-In-Original cannot be sustained and is set aside - appeal allowed.

Summary

Issues Involved:

a) Whether it is established that the goods were sold at prices higher than the Retail Price declared on the goods.

b) Whether the determination of the Retail Price confirmed in the Order-in-Original is in conformity with the Central Excise (Determination of Retail Sale Price of Excisable Goods) Rules 2008.

Issue-wise Detailed Analysis:

a) Sale of Goods at Prices Higher than the Declared Retail Price:

The primary contention was whether the goods were sold at prices higher than the Retail Price (RSP) declared on the goods. The Show Cause Notice relied on statements from dealers indicating that tiles were sold for full value by cheque, and partially by cash, but these statements did not confirm that the full value exceeded the declared RSP. The tribunal observed that the department did not record statements from buyers who allegedly paid more than the RSP. The tribunal noted that without evidence of buyers paying above the declared RSP, it could not be concluded that goods were sold at higher prices. The tribunal referenced the case of CC v Savi Vision P. Ltd, emphasizing the necessity of buyer inquiry to establish sales above the declared RSP.

b) Conformity with Central Excise Rules 2008:

The tribunal examined whether the determination of the RSP was in line with the Central Excise (Determination of Retail Sale Price of Excisable Goods) Rules 2008. It was noted that Section 4A (4) is applicable only under specific conditions, none of which were satisfied in this case. The tribunal highlighted that the Show Cause Notice failed to allege or prove any tampering or alteration of the RSP post-manufacture, nor did it show that the declared RSP did not meet the Standards of Weights and Measures (Packaged Commodities) Rules 1977. The tribunal concluded that the mere allegation of dealers selling goods at higher prices did not invalidate the RSP under the said standards.

Further, the tribunal observed that the reliance on a price list from 2005 to determine the RSP was not in accordance with the prescribed method under the 2008 rules, which require RSP determination based on actual market prices at the time of removal. The tribunal noted that the price list itself stated that prices were subject to change, making it an unreliable basis for RSP determination over multiple years.

Additional Observations:

The tribunal addressed the denial of cross-examination rights to the appellants, citing the Supreme Court's decision in Andaman Timber Industries, which mandates such rights when statements are relied upon. The tribunal found the Commissioner's reasoning for denying cross-examination flawed and noted that the statements of dealers and builders lacked credibility as they were not corroborated by independent evidence or subjected to cross-examination.

The tribunal also dismissed the reliance on computer print-outs of emails as evidence, as the requirements of Section 36B of the Central Excise Act 1944 were not met, rendering them inadmissible.

Conclusion:

The tribunal concluded that the impugned Order-in-Original was unsustainable due to the lack of evidence supporting sales above the declared RSP and the improper determination of RSP under the 2008 rules. The tribunal set aside the order, allowing the appeals with consequential relief as per law.