2014 (3) TMI 664 - AT - Central Excise

Waiver of pre deposit - Duty demand - Inclusion of price of Ujala Supreme in value of detergent powder known as Ujala Bright Wash - Held that - Ujala Supreme is not manufactured in the factory where assessment is taking place. The goods given free are not packed along with the detergent powder and if at all they are packed the maximum price at which the goods are sold is the price of detergent powder which alone can form the basis for arriving at the excisable value and therefore the entire approach of Revenue to add the MRP of the two products to arrive at the assessable value is wrong - Therefore, we grant waiver of pre-deposit of the dues arising out of the impugned order and stay its collection during the pendency of the appeal - Stay granted.

Summary

Issues:
1. Assessment of excise duty on the basis of combined MRP of two products.
2. Interpretation of Section 4A of the Central Excise Act.
3. Application of a previous Tribunal decision to the current case.

Analysis:
1. The appellants, manufacturers of detergent powder and a whitening product, faced a demand of Rs. 62,405/- for the period from April 2009 to September 2009. The Revenue believed that the Maximum Retail Price (MRP) of the whitening product should be added to the MRP of the detergent powder for excise duty assessment under Section 4A of the Act. The appellants argued that the whitening product was not manufactured at the assessed factory, and even if given free with detergent, its MRP should not be added for excise duty calculation.

2. The counsel for the appellants contended that since the whitening product was not packed along with the detergent powder and was not sold at a separate price, the MRP of the detergent powder alone should be considered for excise duty valuation under Section 4A. The Tribunal noted that the previous decision cited by the Revenue involved products packed together, unlike the current case. As the products were not packed together, the Tribunal found no justification for adding the MRP of both products for excise duty calculation. Consequently, the Tribunal granted a waiver of pre-deposit of the dues and stayed its collection during the appeal process.

3. The learned AR for Revenue relied on a Tribunal decision in the case of CCE, Belapur v. Nandan Petrochem Ltd. The Tribunal distinguished this case from the present one, highlighting that the previous case did not pertain to products assessed under Section 4A of the Act and involved packed products. Since the products in the current case were not packed together, the Tribunal found the Revenue's approach unjustified and granted relief to the appellants by waiving the pre-deposit requirement and staying the collection of dues pending appeal.

This judgment clarifies the application of Section 4A of the Central Excise Act regarding excise duty assessment based on the MRP of products, emphasizing the importance of considering the specific circumstances of each case, especially regarding the packaging and pricing of goods.