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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 ..... 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 reference to retail sale price. - (1) The Central Government may, by notification in the Official Gazette, specify any goods, in relation to which it is required, under the provisions of the Legal Metrology Act, 2009 (1 of 2010) or the rules made thereunder or under any other law for the time being in force, to declare on the package thereof the retail sale price of such goods, to which the provisions of sub-section (2) shall apply. (2) Where the goods specified under sub-section (1) are excisable goods and are chargeable to duty of excise with reference to value, then, notwithstanding anything contained in section 4, such value shall be deemed to be the retail sale price declared on such goods less such amount of abatement, if any, from such retail sale price as the Central Government may allow by notification in the Official Gazette. (3) The Central Government may, for the purpose of allowing any abatement under sub-section (2) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice 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 of those goods: and b) the goods should have been notified by the Central Government under section 4A. 5. If these two conditions are met, duty should be charged on the Retail Sales Price RSP with abatement as provided in the notification. 6. It is undisputed that the LED bulbs manufactured by the appellant were covered under section 4A and the appellant has been paying duty on the RSP with an abatement of 35% as per notification no. 49/2008. The appellant also manufactured and sold LED bulbs to the Energy Efficiency Services Ltd. EESL (which is a Government of India undertaking tasked to promote energy efficiency) under a contract at the contract price which was a much lower (at about Rs. 75/- per bulb compared to RSP of Rs.225/- per bulb) price. As per the conditions of the contract, the appellant did not print any RSP on these bulbs and on the other hand, printed on the bulb and the packing that it was not meant for retail sales. EESL, in turn, sold these to the users ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ii) "industrial Consumer" means the industrial consumer who buy packaged commodities directly from the manufacturer for use by that industry. 11. According to the Revenue, since EESL was not using the bulbs by itself but further selling them, it does not qualify as an 'institutional consumer' and hence sales to EESL are squarely covered by the Legal Metrology Act and consequently under section 4A of the Act. According to the Revenue, the appellant should have declared the RSP on the bulbs sold to EESL as per the Legal Metrology Act and since it failed to do so, the RSP should be determined as per The Central Excise (Determination of Retail Sale Price of Excisable Goods) Rules, 2008. 12. According to the Revenue, applying these Rules, the RSP to determine duty under section 4A shall be the same as the RSP for other bulbs sold in the market by the appellant. Accordingly, differential duty must be recovered from the appellant and extended period of limitation of five years under section 11A was rightly invoked and therefore, the demand is not time-barred. 13. The reasons for invoking extended period of limitation given in the SCN is as below: "17. Thus, it appears that the Noti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 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 from retail outlets. It is clearly brought out in the show cause notice that point no. 10 (h) of the Letter of Award issued by EESL to the assessee states that "suppliers have to provide the details of the Retail outlets for bulk replacement within 10 days after completion of distribution for respective cities". Further point no. 10(i) of the said Award letter further states that "Suppliers have to maintain complaint register at their respective Retail outlet in order to keep bulb replacement record". These clauses in the LOA clearly reflect the fact that LED lamps were supplied to consumers for replacement from retail outlets and contradicts their claim that the LED bulbs had not been put up for retail sale. Thus, there was suppression of facts also. But for the present investigation, the facts of the matter could not have been brought to light. 65.4. These acts on the part of the assessee tantamount to willful misstatement and suppression - with intent to evade duty. As the assessee was also clearing identical goods in the open mar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t 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 the following reply from the inspector of Legal Metrology department: " To, Surya Roshni Limited (Lighting Division) J7 to 711, Malanpur Industrial Area, Malanpur Bhind, MP Sub: Regarding MRP Under "UJALA" Scheme, LED LAMPS SURYA ROSHINI LTD (SURYA) Ref: Your Letter dated 21.10.2019 Dear Sir, It is to intimate in reference to the subject above that it is clear the letter and annexure sent by you that Surya Roshini Limited Malanpur Bhind is manufacturing LED Bulb of 7 Watt for UJALA, a scheme declared by the Energy Ministry for energy efficiency services. As EESL is the institutional consumer of Surya Roshini Limited, which is under Rule 2 (bc) of Legal Metrology (Packaged Commodities) Rules, 2011, Amended Rules, 2017 and " Not for Sale" has been written on the package as per rule. Therefore, according to Rule 3(b) of PC Rule, 2011, mentioning the maximum retail price (MRP)(Defined Rule 2m) in terms of Rule 6(e) of PC Rules, 2011, is not required. Therefore, mentioning MRP on LED bulbs (under "UJALA" scheme) to be supplied after manufac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs gave their own interpretation to the Legal Metrology Rules and raised the demand through the SCN. 21. According to the learned counsel for the appellant, this case is identical to the cases where the goods are sold on contract to the Canteen Stores Departments CSD of the armed forces who, in turn, sell them in retail to their employees. It has been held in the following cases that such sales are not covered by the Legal Metrology Rules and valuation does not have to be as per section 4A of the Act: (a) Charms Cosmetics Pvt Ltd. vs. Commissioner of Central Excise, Pune, 2017 (352) ELT 197 (Tri.-Mumbai) (b) Charms Cosmetics Pvt Ltd. vs. Commissioner of Central Excise, Pune-I, 2018 (5) TMI 2041-CESTAT MUMBAI (C) Wipro Limited vs. Commissioner of Central Excise, Service Tax, & Customs, Bangalore 2018 (3) TMI 981-CESTAT BANGALORE 22. According to the learned authorised representative and as per the impugned order, this case is different because unlike CSD which sells goods to its own employees, EESL sells them to all consumers of electricity, which is practically everyone. This case is more akin, according to the department, to the case of P G Electroplast Ltd. vs Commissione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ough we have found in favour of the appellant on merits, we also proceed to examine the question of limitation raised by the appellant. It is not in dispute that Section 11A provides for a limitation of one year for issuing the SCN. This period can be extended to five years in case the duty is not paid, short paid, not levied, short levied or erroneously refunded on account of fraud or collusion or willful statement or suppression of facts or violation of the provisions of Act or Rules with an intent to evade the payment of duty. In this case, the SCN alleges that the appellant had deliberately suppressed facts with intent to evade payment of duty and therefore, invoked extended period of limitation. The relevant paragraph of the show cause notice has been reproduced above. 26. The Principal Commissioner invoked extended period of limitation and the relevant paragraphs have been reproduced above. 27. It is a matter of record that the appellant had self-assessed duty and filed ER-1 Returns in time as per its understanding. We find it unacceptable for the department to allege that the appellant had an intention to evade payment of central excise duty on the bulbs supplied to EESL a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stores such goods in a warehouse, shall pay the duty leviable on such goods in the manner provided in rule 8 or under any other law, and no excisable goods, on which any duty is payable, shall be removed without payment of duty from any place, where they are produced or manufactured, or from a warehouse, unless otherwise provided Xxxxxxx Rule 6. Assessment of duty.- The assessee shall himself assess the duty payable on any excisable goods: Provided that in case of cigarettes, the Superintendent or Inspector of Central Excise shall assess the duty payable before removal by the assessee. Rule 8. Manner of payment. - (1) The duty on the goods removed from the factory or the warehouse during a month shall be paid by the 6th day of the following month, if the duty is paid electronically through internet banking and by the 5th day of the following month, in any other case: Provided that in case of goods removed during the month of March, the duty shall be paid by the 31st day of March: Xxxxxx Rule 12 Filing of return.- (1) Every assessee shall submit to the Superintendent of Central Excise a monthly return in the form specified by notification by the Board, of productio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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