1999 (6) TMI 191 - AT - Central Excise

Summary

Issues:
1. Determination of assessable value of footwear under Section 4A.
2. Imposition of duty and penalty by the Commissioner.
3. Interpretation of the term 'value' in Tariff sub-heading 6401.12.
4. Application of Section 4A for determining the value of goods.
5. Impact of subsequent amendment on the interpretation of value.

Issue 1: Determination of assessable value of footwear under Section 4A:
The appellants contended that the assessable value of footwear should be determined under Section 4A, applicable from 1st September 1997, which provides for an abatement of 50% of the retail sale price. The department issued a show cause notice alleging duty evasion, leading to the Commissioner confirming the duty amount and imposing a penalty. The appellants argued that the value determined under Section 4A correctly applied, ensuring nil rate of duty under sub-heading 6401.12.

Issue 2: Imposition of duty and penalty by the Commissioner:
The Commissioner upheld the duty amount and imposed a penalty under Rule 173Q of the Central Excise Rules. Failure to pay the duty would attract interest at 20% under Section 11AA of the Act. The appellants challenged this decision, emphasizing the correct determination of duty under Section 4A.

Issue 3: Interpretation of the term 'value' in Tariff sub-heading 6401.12:
The debate centered on whether the term 'value' in Tariff sub-heading 6401.12 referred to the retail sale price or the price at which the goods are sold in the market. The appellants argued for the former interpretation, while the Revenue advocated for the latter, leading to a dispute over the applicable duty rate.

Issue 4: Application of Section 4A for determining the value of goods:
The appellants contended that the provisions of Section 4A for valuation of excisable goods should override Section 4, as specified under Section 4A, especially for goods like footwear falling under Tariff Heading 64.01. The use of the term 'notwithstanding' in Section 4A supported their argument for the exclusive application of Section 4A in determining the value of goods.

Issue 5: Impact of subsequent amendment on the interpretation of value:
The subsequent amendment changing the limit from Rs. 75 to Rs. 125 in Tariff sub-heading 6401.12 was a point of contention. The appellants argued that this amendment supported their interpretation of 'value' as the retail sale price, while the Revenue's alternative plea was not accepted. The Tribunal found that the subsequent amendment could not be applied retrospectively for interpreting the provisions during the relevant period.

In conclusion, the Tribunal set aside the impugned order, allowing the appeal in favor of the appellants, emphasizing the correct application of Section 4A for determining the value of footwear and rejecting the Revenue's interpretation of the term 'value' in Tariff sub-heading 6401.12.