2000 (11) TMI 1172 - AT - Central Excise

Summary

Issues: Interpretation of Explanation-2 to Section 4A of the Central Excise Act, 1944 regarding valuation of goods under the Standards of Weight and Measures Act, 1976.

Analysis:
1. The case involved the manufacturing of Aerated Waters subject to the Standards of Weight and Measures (Packaged Commodity) Rules, 1977 under the Central Excise Act, 1944. The dispute arose as the goods were sold at different prices in Goa and Maharashtra, with duty paid based on the lower valuation for Goa sales.

2. The Commissioner demanded the differential duty for the higher Maharashtra price, invoking an extended period. Subsequent show cause notices confirmed the duty amount and imposed penalties under Section 11 AC and Rule 173Q. The appeal requested waiver of pre-deposit and stay of recovery of the sums in question.

3. During the hearing, the applicant's representative and the Revenue's representative presented arguments. The applicant relied on a Tribunal judgment in a similar case, emphasizing the interpretation of Explanation-2 to Section 4A of the Central Excise Act, 1944.

4. The Tribunal's cited judgment analyzed the Explanation-2, focusing on the declaration of retail sale prices on excisable goods. It clarified that the higher declared price on containers or packaging should be considered the Maximum Retail Price (MRP) for levy purposes, rejecting the Department's interpretation favoring the higher of two declared prices.

5. The applicant contended that their case aligned with the cited judgment, seeking total waiver based on the interpretation of Explanation-2 and the principles established in the previous case.

6. The Tribunal observed a limitation in the explanation's wording regarding the printing of multiple MRPs on a single package. It noted the Finance Act, 2000's amendment to address this issue by specifying that different retail sale prices on packages in different areas should be considered for valuation.

7. The Tribunal raised concerns about potential duty evasion if the explanation was interpreted to allow duty payment based on the lowest printed price for different regions. It highlighted the need for further examination of the explanation's interpretation to prevent misuse and ensure accurate duty assessment.

8. As a co-ordinate Bench, the Tribunal granted the waiver of pre-deposit and stay of recovery for the pending appeal. However, recognizing the broader implications of the interpretation issue, it referred the matter to the Hon'ble President of the CEGAT for consideration by a Larger Bench to address the interpretation challenges effectively.