2012 (5) TMI 246 - AT - Central Excise

MRP based valuation - declaration of different retail sale prices for different areas - Held that - contention of the Department will have to be rejected as the appellant declares only one retail sale price on the packages sold in one region or State and therefore that alone will be the retail sale price for purpose of Section 4A in regard to such goods sold in such region. The question of applying retail sale price that is declared in some other area or region will not arise - Decided in favor of assessee.

Summary

Issues:
1. Whether the appellants had short paid the excise duty on the sale of Kinley Soda bottles.

Analysis:
1. The issue in this case revolves around the alleged short payment of excise duty amounting to Rs. 47,395 on the sale of Kinley Soda bottles during a specific period. The contention arises from the interpretation of the provisions of law prevailing at that time. The department argues that different MRPs declared by the appellants for different regions were not permissible for duty liability calculation before a certain date, despite a subsequent amendment. The appellants, however, rely on a decision by the Hon'ble Karnataka High Court to dispute this claim.

2. The facts relevant to the decision include the appellants declaring a reduction in the retail sale price of Kinley Soda bottles for a specific region, followed by subsequent price changes. The department's investigation revealed discrepancies in MRPs across different regions, leading to a show cause notice for the duty payment difference. The Adjudicating Authority confirmed the demand, which was unsuccessfully appealed by the appellants, culminating in the current appeal.

3. Referring to the judgment by the Hon'ble Karnataka High Court in a similar case, the Court emphasized the interpretation of Explanation 2 to Section 4A of the Central Excise Act. The Court clarified that where different retail sale prices are declared on different packages for sale in various areas, each price is considered for valuation in its respective area. The Court highlighted that the introduction of a new Explanation 2, though not retrospective, provided clarity on the interpretation of the earlier explanation, supporting the appellant's argument.

4. The impugned order denied the benefit of Explanation 2 to the appellants based on its introduction date, overlooking the retrospective application as interpreted by the Hon'ble Karnataka High Court. The Court concurred with the appellant's position, citing the Karnataka High Court's decision, and quashed the demand, ultimately allowing the appeal.

5. In conclusion, the Court allowed the appeal, setting aside the impugned order and ruling in favor of the appellants based on the interpretation of the relevant legal provisions and precedents cited during the proceedings.