2017 (1) TMI 81 - AT - Central Excise

Valuation - transaction value or MRP based value - Sale on Retail sale price - cement and clinker - Notification No. 4/2006-CE - Held that - the Original Authority did not examine the full scope alongwith settled case law to determine the correctness of appellant s claim for sale to institutional or industrial buyers. The factual position cannot be decided based on statement of officials of the appellant. We also note that due consideration has not been given to the appellant s plea on the statutory definition of retail sale under Rule 2 (q) of the PC Rules - Appeal allowed by way of remand.

Summary

Issues:
1. Discharge of Central Excise duty liability on cement sales.
2. Interpretation of Retail Sale Price (RSP) for concessional duty.
3. Fixation of RSP beyond the scope of show cause notice.
4. Concession under Sl. No. 1C of the notification for sales to industrial and institutional consumers.

Analysis:

Issue 1: Discharge of Central Excise duty liability on cement sales
The appellant, engaged in cement manufacturing, cleared cement in 50 kg bags to various buyers. The Revenue alleged incorrect discharge of Central Excise duty, leading to a demand of ?1,29,53,203. The Original Authority confirmed a demand of ?76,06,585 and imposed a penalty of ?1,00,000. The dispute centered on the Retail Sale Price (RSP) adopted by the appellant for contracted sales, which did not fully reflect the components required by the notification for duty payment.

Issue 2: Interpretation of Retail Sale Price (RSP) for concessional duty
The Original Authority held that the RSP should include all relevant components like taxes, freight, commission, etc., as per the notification for concessional duty eligibility. The RSP printed on the cement bags did not include certain charges, leading to the conclusion that the duty paid RSP did not align with the notification's definition. Consequently, the concessional duty under Sl. No. 1A was deemed unavailable to the appellant.

Issue 3: Fixation of RSP beyond the scope of show cause notice
The Original Authority, after the above conclusion, attempted to fix the RSP based on prevalent rates for the cement's destination. The appellant contested this, arguing it exceeded the show cause notice's scope and that excise officers cannot derivatively fix RSP. The Tribunal found no legal basis for such action, emphasizing that RSP should be printed on the excisable goods' package.

Issue 4: Concession under Sl. No. 1C for sales to industrial and institutional consumers
The appellants sought concession under Sl. No. 1C, claiming sales to industrial and institutional consumers. The Original Authority did not fully examine this claim, failing to consider relevant case law and the statutory definition of retail sale. The Tribunal noted the oversight and directed the Original Authority to reevaluate the case, providing the appellant with a fair opportunity to present their arguments.

In conclusion, the Tribunal set aside the impugned order and remanded the matter to the Original Authority for a fresh decision on all issues, ensuring a comprehensive review and due consideration of the appellant's contentions.