2011 (1) TMI 1009 - AT - Central Excise

Valuation - job work - Demand of duty, penalty and interest - assessee discharged the duty liability on the MRP less abatement granted as per provisions - whether a pack of three soaps having individual MRP printed on them, which are secured by a wrapper indicating that three soaps are for sale for MRP of ₹ 24/- are to be assessed accordingly or on MRP of ₹ 12/- indicated on individual pack or not/- Held that - The case laws cited by the assessee are of no help to him as in the case of CCE, Mumbai Vs. Godrej Soaps Ltd. 2005 (11) TMI 141 - CESTAT, MUMBAI the issue was not of multiple pack. In the case of Henkal Spic India Ltd. 2009 (11) TMI 574 - CESTAT, CHENNAI there is a clear finding that the maximum price of individual cake was not visible at the time of clearance of the goods as the same has been deleted from the wrapper. The decision in the case of Godrej Industries Ltd., Vs. CCE, Mumbai (2005 (10) TMI 298 - CESTAT, MUMBAI) is also of no help as in that case also the wrapper of each soap in addition had a MRP clearly struck out with a declaration individual cake not intended for retail sale branded thereto and each wrapper also indicated that the scheme Buy 2, Get 1 Free followed by a pack of 3 (3x75 Gms) MRP ₹ 27/- (inclusive of all taxes). Thus factual findings of the adjudicating authority in this case, it is find find that the assessee has failed to make out any case. Accordingly the order of adjudicating authority that the assessee has to discharge the duty @ ₹ 36/- for a pack of three soaps less admissible abatement is confirmed. As no allegation of fraud, collusion, willful mis-statement, suppression of facts or contravention of the provisions of law with an intent to evade duty are made out, no penalty is imposable in this case - appeal filed by the Revenue is partly allowed.

Summary

Issues: Valuation of multi-pack of three cakes of soap Shikakai brand

Analysis:
1. Background: Both the Revenue and the assessee appealed against the order of the Commissioner (Appeals) regarding the valuation of a multi-pack of three cakes of Shikakai soap. The assessee manufactured the soap on job work basis and discharged duty liability based on MRP less abatement.

2. Facts: The dispute arose when the adjudicating authority rejected the assessee's claim to discharge duty on the multi-pack @ Rs.24/- and instead held that duty should be paid @ Rs.36/- for the pack of three cakes of soap. The assessee challenged this decision, leading to appeals and cross-objections.

3. Legal Arguments: The assessee argued that the multi-pack was offered at a special price, and the individual cakes were not intended for separate sale. They cited relevant case laws and provisions of the Central Excise Act to support their position.

4. Revenue's Position: The Revenue contended that the individual MRP of Rs.12/- per pack was visible on the wrapper of each soap, indicating that the individual cakes could be sold separately. They relied on a CBEC Circular to support their valuation method.

5. Judgment: The Tribunal analyzed the wrapper of the individual pack and the multi-pack. They noted that the MRP of Rs.12/- was clearly printed on the individual pack, and removing the multi-pack wrapper did not destroy the individual pack's wrapper. Referring to the CBEC Circular, the Tribunal held that if individual items could be sold separately at the MRP printed on them, then the aggregate MRP of the multi-pack should be considered for duty payment.

6. Precedents: The Tribunal distinguished the cited case laws, emphasizing that the facts of those cases were not relevant to the present dispute. They concluded that the assessee failed to establish a case for a different valuation method and upheld the duty payment @ Rs.36/- for the multi-pack.

7. Penalty: Since no fraudulent intent or contravention of law was found, the Tribunal waived the penalty. The appeal by the assessee was rejected, and the appeal by the Revenue was partly allowed by confirming duty and interest while waiving the penalty.

This detailed analysis of the judgment highlights the key legal arguments, factual background, relevant precedents, and the Tribunal's reasoning in resolving the valuation issue of the multi-pack of three cakes of soap Shikakai brand.