2001 (6) TMI 354 - AT - Central Excise

Summary

Issues: Application for waiver of pre-deposit of Central Excise duty and penalty. Interpretation of Section 4A of the Central Excise Act. Time limitation for demand. Allegations of clearing goods at different MRPs.

Interpretation of Section 4A of the Central Excise Act:
The application filed by M/s. Hindustan Appliances sought waiver of pre-deposit of Central Excise duty and penalty. The contention was based on the insertion of Section 4A in the Central Excise Act by the Finance Act, 1997, making duty payable based on Maximum Retail Price (MRP) effective from 2-6-1998. The Commissioner had demanded duty and imposed a penalty, citing that the MRP on the cartons of finished goods was higher than the MRP indicated on sale invoices. The applicant argued that they affixed new labels with revised MRPs over the pre-printed MRPs on cartons, as permitted by the Standards of Weights and Measures Act. The Commissioner referred to Explanation 2(a) of Section 4A, stating that the higher MRP on packages should be considered for duty payment. The applicant highlighted that this explanation came into effect from 12-5-2000, while the demand pertained to the period from 2-6-1998 to 27-11-1998. They also argued that the demand was time-barred as the show cause notice was issued beyond the specified six-month period.

Time Limitation for Demand:
The opposing party contended that the applicants were clearing goods at different MRPs, as evidenced by appliances found with higher MRPs during a search. They argued that the applicants failed to provide evidence regarding the availability of cartons printed before the introduction of Section 4A. It was suggested that the larger period of limitation under Section 11A of the Central Excise Act applied due to alleged suppression of MRPs on sale invoices and clearance of goods at a lower assessable value.

Decision and Waiver of Pre-deposit:
Upon considering both submissions, the tribunal noted that the revised MRPs were affixed over pre-printed MRPs on cartons, a fact not rebutted by the Revenue. The tribunal found a strong prima facie case for waiver of the entire amount of duty and penalty. It was contended that the 68 pieces seized from another premises were from earlier supplies by the applicants. Consequently, the tribunal waived the requirement of the entire amount of duty and penalty, staying the recovery during the appeal's pendency.