2014 (6) TMI 56 - AT - Central Excise

Waiver of pre-deposit - Valuation of goods - Transaction value or MRP based - supply has been made to institutional/industrial buyers - Determination of value under Section 4 of the Central Excise Act, 1944 or under Section 4A - Held that - Even though the quantity is supplied in bulk, it is clearly indicated in the purchase orders that the goods have to be supplied in boxes of 15 tiles. This indicates that the supplies are made in retail packs on which MRP is printed. Further, we notice there is hardly any time-gap between receipt of the purchase order and effecting the supply, which would also show that the supplies are made out of the quantity already manufactured by the appellant, packed and kept ready for sale. In this view of the matter, and also considering the decision of this Tribunal in the case of H & R Johnson, cited 2013 (11) TMI 1185 - CESTAT BANGALORE , the appellant has made out a case for grant of stay - Stay granted.

Summary

Issues:
- Appeal against Order-in-Original confirming Central Excise duty, interest, and penalties.
- Determination of duty liability under Section 4 of the Central Excise Act, 1944 versus Section 4A.
- Grant of stay petition based on discharge of duty liability under Section 4A.

Analysis:
The judgment pertains to an appeal and stay petition challenging Order-in-Original No. 26-28/MAK(26-28)COMMR/RGD/13-14 dated 28/06/2013 issued by the Commissioner of Central Excise, Ragiad. The impugned order confirmed a Central Excise duty of Rs. 1,11,95,715/- along with interest and penalties, asserting that the value should be determined under Section 4 of the Central Excise Act, 1944 for supplies to institutional/industrial buyers, not under Section 4A. The appellant argued that they discharged duty liability under Section 4A as the goods supplied were pre-manufactured and packed in retail packs with MRP. Reference was made to a similar case involving M/s. H & R Johnson (India) Ltd., where a stay was granted against a differential duty demand. The Additional Commissioner for the Revenue contended that the duty should have been discharged based on the sale value under Section 4.

The Tribunal carefully examined the purchase orders, noting that the goods were to be supplied in retail packs of 15 tiles with printed MRPs, indicating pre-packaged supplies. The quick turnaround from order receipt to supply suggested the goods were already manufactured, packed, and ready for sale. Citing the precedent of H & R Johnson's case, the Tribunal found merit in the appellant's argument for discharging duty liability under Section 4A. Consequently, the Tribunal granted a waiver from pre-deposit of the dues and stayed recovery during the appeal process.

In conclusion, the judgment addressed the issues of duty liability determination under different sections of the Central Excise Act and the grant of a stay petition based on the discharge of duty under Section 4A for pre-packaged supplies. The decision highlighted the importance of purchase order details and pre-existing packaging in assessing duty liability, ultimately favoring the appellant's position and granting relief from immediate payment obligations.