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TMI Blog2024 (1) TMI 980X X X X Extracts X X X X X X X X Extracts X X X X ..... y Rules which require the RSP to be printed on the goods. Evidently, the purpose of not printing the RSP and further prohibiting their retail sales by printing it on these bulbs is to prevent their diversion and sale in the market. If the retail sale price in the market of a bulb is about Rs. 225/- and it is being supplied by the EESL through its network for about Rs. 75/-, some checks are required to prevent the EESL bulbs from being diverted and sold in the market for profit. If it is interpreted that the Metrology Rules to cover these bulbs, it would mean that RSP should have been printed on them and the very condition of the contract issued by EESL is illegal. At any rate, it is not in dispute that these bulbs were not sold in the market and were only distributed through EESL (though after collecting some price). If that be the case, to say that the RSP should have been printed is incongruous. How can a retail price be printed on the goods whose retail sale is banned?. It is therefore found that LED bulbs sold by the appellant to EESL were not covered by Metrology Rules and hence section 4A of the Act will not apply and self assessment has been correctly done by the appellan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... STICE DILIP GUPTA , PRESIDENT And HON'BLE MR. P. V. SUBBA RAO , MEMBER ( TECHNICAL ) For the Appellant : Shri B L Narasimhan , Ms. Sukriti Das and Ms. Mehek Mehra , Advocates For the Respondent : Shri Manish Kumar Chawda , Authorised Representative ORDER P V SUBBA RAO : M/s. Surya Roshini Ltd. Appellant filed this appeal to assail the Order in Original Impugned order dated 31.03.2021 passed by the Principal Commissioner, Bhopal whereby he confirmed the proposals made in the Show Cause Notice dated 02.06.2020. 2. We have heard learned counsel for the appellant and learned authorised representative and perused the records. 3. The appellant manufactures Light Emitting Diode (LED) bulbs and which are chargeable to central excise duty on ad valorem basis. As per section 4 of the Central Excise Act, 1944 Act , central excise duty should be paid at the rates specified in the central excise tariff on the transaction value, i.e., the value at which the manufacturer sells the goods. However, an exception is carved out for certain goods which are covered under section 4A which reads as follows: Section 4A. Valuation of excisable goods with refer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uire to declare on the package, the retail sale price excluding any taxes, local or otherwise, the retail sale price shall be construed accordingly. Explanation 2. - For the purposes of this section, - (a) where on the package of any excisable goods more than one retail sale price is declared, the maximum of such retail sale prices shall be deemed to be the retail sale price; (b) where the retail sale price, declared on the package of any excisable goods at the time of its clearance from the place of manufacture, is altered to increase the retail sale price, such altered retail sale price shall be deemed to be the retail sale price; (c) where different retail sale prices are declared on different packages for the sale of any excisable goods in packaged form in different areas, each such retail sale price shall be the retail sale price for the purposes of valuation of the excisable goods intended to be sold in the area to which the retail sale price relates. 4. Thus, for the goods to be chargeable to central excise duty under section 4A: a) it must be necessary under the Legal Metrology Act and the Rules made thereunder to declare Retail sale price o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssion of facts or violation of the provisions of the Act or Rules with an intent to evade payment of duty were absent in this case. 10. The case of the Revenue is that since the LED bulbs are notified under section 4A, duty should have been paid under that section even in respect of sales to EESL. EESL is not an institutional consumer as per Rule 3 of the Metrology Rules which reads as follows: 3. Applicability of the Chapter. The provisions of this Chapter shall not apply to, (a) packages of commodities containing quantity of more than 25 kg or 25 litre excluding cement and fertilizer sold in bags up to 50 kg; and (b) packaged commodities meant for industrial consumers or institutional consumers. Explanation :- For the purpose of this rule,- i) institutional consumer means the institutional consumer like transportation, Airways, Railways, Hotels, Hospitals or any other service institutions who buy packaged commodities directly from the manufacturer for use by that institution. ii) industrial Consumer means the industrial consumer who buy packaged commodities directly from the manufacturer for use by that industry. 11. According to the Re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and not paid by the Noticee. 14. The reasons given in the impugned order for invoking extended period of limitation are as follows: 65.1 The assessee has further contended that extended period of limitation has been incorrectly invoked as no proper reasons was advanced. It has been stated that they had all along filed ER-1 returns, maintained all relevant records and the department was aware of their manufacturing activities. I do not find any merit in the assessee's aforesaid contention, on account of the following reasons. 65.2 The assessee have themselves admitted that the packages cleared to EESL had been printed with the words 'NOT FOR RESALE and they did not assess the liability under Section 4A of the Central Excise Act despite knowing fully well that the goods were intended to be sold to ultimate consumers. This act has to be construed as willful misstatement. This act was a positive act on the part of the assessee to claim exemption from affixing MRP and consequently to escape assessment under Section 4A of the Central Excise Act. 65.3 Further, the assessee has not disputed the fact brought out in the notice that part of supplies to EESL were fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Thus, the three short questions to be answered by us in this case are: a) Are the bulbs sold by the appellant to EESL liable to be charged to excise duty under section 4 (on the transaction value) or under section 4A (on the RSP minus abatement)? b) If the bulbs sold to EESL are liable to be charged to excise duty under section 4A, what should be reckoned as the RSP- the price at which EESL sold the bulbs to the consumers or the price at which the appellant sold bulbs in the market? c) Was extended period of limitation correctly invoked in this case? Applicability of Legal Metrology Rules to the bulbs sold on contract to EESL 16. The legal position that LED bulbs are covered under the Legal Metrology Act and Rules and under section 4A of the Act is not in dispute. It is also not in dispute that these, however, do not apply to sales to institutional consumers . The only dispute is if EESL was an institutional consumer or not. Interestingly, both Revenue and the appellant had written to different offices of the Legal Metrology department asking if the sales to EESL are covered by the Legal Metrology Rules and if the RSP had to be declared. 17. The appellant got ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... very department which is supposed to enforce those Rules is also either not clear whether or not the sales to EESL covered by the requirement of RSP and had not clarified the legal position to the Central Excise department. There is no letter on record from anybody of the Legal Metrology Department stating clearly that the bulbs sold to EESL were covered by the Legal Metrology Rules. If they were of the view that these sales were covered by the Legal Metrology Rules, having been informed by the Central Excise officers about these sales, they would have initiated action against the appellant for not printing the RSP on the bulbs. Thus, from the conduct of the head quarters of the Legal Metrology Department in Bhopal and from the explicit clarification of the inspector of that department in Bhind, it is evident that in their opinion, the sales to EESL were not covered by the Legal Metrology Rules. 20. However, since the headquarters of the Legal Metrology Department only referred to the Legal Metrology Rules and did not state that the sales to EESL were covered by them or not, the central excise officers gave their own interpretation to the Legal Metrology Rules and raised the dem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the market and were only distributed through EESL (though after collecting some price). If that be the case, to say that the RSP should have been printed is incongruous. How can a retail price be printed on the goods whose retail sale is banned? We, therefore, find that LED bulbs sold by the appellant to EESL were not covered by Metrology Rules and hence section 4A of the Act will not apply and self assessment has been correctly done by the appellant on the basis of transaction value as per section 4. What is the RSP of the LED bulbs sold to EESL? 24. As we have found that there is no retail sale but only supply of LED bulbs through EESL, there cannot be a retail sale price. Retail sale of these bulbs is explicitly prohibited. Therefore, these bulbs cannot fall under the same category as the bulbs which can be freely sold in the market and hence have a RSP. It is true that EESL was supplying these bulbs to consumers of electricity as per a scheme and was also collecting an amount from them but in our considered view that does not make it RSP as per Metrology Rules or as per section 4A. Extended period of limitation 25. Although we have found in favour of the appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ume that the appellant must, however, have been sure that the Metrology Rules would apply and only with an intent to evade payment of duty, not applied them and paid duty under Section 4A. 29. There can be two or more views on the same issue and the assessee will self-assess the duty as per its view and understanding and is not required to foresee what view the officers may take sometime in the future after consulting other departments. The Excise Rules provide not only for self-assessment of duty and filing of returns by the assessee in ER-1, but also scrutiny of the returns by the officers. Duty of excise is charged on excisable goods manufactured or produced in India but the duty becomes payable on removal (Rule 4). The assessee has to self- assess (Rule 6) the duty and pay it by the fifth day of the following month (Rule 8) and file Returns (Rule 12). The officers have to scrutinize the returns and can, for the purpose call for documents and records which the assessee is bound to produce. The relevant Rules are reproduced below: Rule 4. Duty payable on removal.- (1) Every person who produces or manufactures any excisable goods, or who stores such goods in a warehou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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