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TMI Blog2024 (2) TMI 727X X X X Extracts X X X X X X X X Extracts X X X X ..... belief that there was no requirement to affix MRP on the switchgear products sold by them industrial/institutional consumers through their dealers and these were exempted under the Packaged Commodity Rules, 1977. Moreover, it is an admitted fact that they were affixing a sticker on their own on the packages of their products that they are Specially packed for the exclusive use of an industry as a raw material or for the purpose of servicing any industry, Mine or quarry for industrial use only and not intended to be displayed for sale at a Retail Outlet. Hence, it is to be noted that there is no mis-declaration by the Appellant to intentionally evade payment of duty. The Appellants have been issuing invoices under Rule 11 of Central Excise Rules and periodically filing ER 1 returns disclosing the value adopted for the clearances and it is not the case of deliberate and wilfully evading payment of duty and hence the proviso to Section11 A(1) is not invokable and hence the penalty imposed under Section 11 Ac will not sustain. In fact the impugned order has not adduced any evidence on the above allegation and the intention to evade payment of duty due to any contraventions of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tomers sold through their depots and dealers at Normal transaction value, instead of assessing under Section 4A of the Act ibid, resulting in short payment of duty . It is to be noted that he Appellant have voluntarily started paying duty on MRP value under Section 4A w.e.f. 28.05.2008. 2.2 Consequently, the Show Cause Notice No. 10/2012 dated 01.05.2012 was issued proposing to demand the differential duty of Rs.1,48,31,636/- payable between the value under Section 4 and 4A for the period from 01.04.2007 to 27.05.2008 under proviso to Section 11A(1) of the Central Excise Act,1944 besides proposing to impose penalty under Section 11AC ibid read with Rule 25 of central Excise rules 2002, levy of interest under Section 11AB ibid and appropriation of an amount of Rs.25,00,000/- paid under protest by the Appellant towards above dues. 2.3 After due process of law, the Adjudicating Authority vide Order-in-Original No. 21/2013 dated 22.05.2013, confirmed the demand of differential Excise Duty of Rs.1,48,31,636/- for the period from 01.04.2007 to 27.05.2008 and imposed penalty equal to duty confirmed in terms of Section 11 AC of the Central Excise Act, 1944 read with Rule 25 of Centra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial Customers and department could not adduce any evidence to prove otherwise. Appellant submitted that as per the above provisions of Packaged Commodities Rules, 1977, goods meant for industry/ institutional customers are not required to be affixed with MRP. Therefore, it was contended that impugned goods were not liable to be assessed under Section 4A as the provisions of Chapter II of the Packaged Commodities Rules are not attracted and thus the MCCB S are correctly valued under Section 4 of the Central Excise Act, 1944. 3.2 It was further submitted that MCCB s manufactured by the Appellant were used in applications that require a higher electrical power flow such as those in industrial or commercial establishments and that the products were cleared from its factory to depots on stock- transfer basis, on payment of duty, which are subsequently sold to dealers as well as institutional and industrial buyers from those depots which is contrary to the stand taken in the impugned Order that sale has taken place at depots and the buyer of goods is not known at the factory gate. 3.3 It was further contended that the reliance on the judgement of the Hon ble High Court of Mumbai in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 99 (Tri.-Bang.)]. It was contended that the lower authority had rather relied on explanation I to sub-section of Section 4 to confirm the demand. 3.5 It was further pointed out that the issue of valuation under Section 4 for goods for exclusive use of industries is already decided by the Hon ble Tribunal in the case of Control and Switchgear Contractors Ltd. Vs. Commissioner of Commissioner of Central Excise, Noida [2005 (183) ELT 95 (Tri.-Del.)] wherein it was held that the goods are not liable for assessment under Section 4A as the goods are specifically packed for exclusive use of Industries and the revenue had not adduced any evidence that the goods in question are meant for retail sale. The above judgement has been affirmed by the Hon ble Supreme Court in [2011 (274) ELT A109 (SC)] which has not been accepted by the lower authority citing legal changes to MRP regulations. 3.6 It was submitted that the quantification of demand is incorrect as MRP is to be determined as per the provisions of Determination of Retail Sale Price Rules, 2008 which do not have retrospective application. Assuming that Section 4A is applied, list price cannot be adopted as MRP since MRP depends o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tral Excise [2004 (163) ELT 219 (Tri.)] ix. Birla Corporation Ltd. Vs. Commissioner of Central Excise [2002 (148) ELT 1249 (Tri.)] x. Secretary Town hall Committee Vs. Commissioner of Central Excise [2007 (8) STR 170 (Tri.-Bang.)] 4.1 The Ld. counsel has further submitted that in the appellants own case for another unit, on the very same issue, the lower authority has held that extended period of limitation cannot be invoked. On further appeal, CESTAT, Mumbai had vide Final Order No. A/85749/2019 dated 16.04.2019 upheld the order of the lower authority on limitation and penalty imposed was set aside. As there was no further appeal by the department, the issue attained finality and thus extended period of limitation could not be invoked. 4.2 It was submitted that during the impugned period, the Appellant was registered with the department and was periodically filing ER 1 returns. There was no suppression of information with intent to evade payment of duty as all the facts were within the knowledge of the department. Hence extended period of limitation cannot be invoked in the absence of any positive act. Further reliance was placed on:- i. Anand Nishikawa Co. Lt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... machinery provisions available to determine the MRP for the product? iii. Whether the list price can be adopted to determine MRP as per the Rule 4(a)(ii) of Central Excise (Determination of Retail Sale Price of Excisable Goods) Rules, 2008 or not? and iv. Whether the demand for extended period of limitation is sustainable or not? 8.1 All the issues above, as pointed out by the Ld. counsel for the Appellant have been already resolved in the Appellant s own case for their Nashik unit, vide Final order dated 17.01.2014 reported in [2014 (311) ELT 113 (Tri.-Mum.)]. He has admitted during the hearing before the Tribunal that the issues involved are against the appellant on merits. 8.2 Regarding 7(i), the issue was decided on a consensus by the Division bench and the issues at 7(ii) to 7(iii) above were resolved by the third member as the Judicial and Technical members differed on their opinions. The issue wise decisions have been reproduced below: Regarding 7(i), the issue was decided as follows: As the decision of the Hon ble High Court of Bombay in the case of Larsen Toubro Ltd. (supra) has not been set aside by the Hon ble Apex Court. Therefore in the light of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. It is indeed moot if a manufacturer is to be saddled with differential duty, despite intention to institutional or industrial customers, merely because an independent entity in the trade channel does sell the goods in retail. The substantive gap between an assessee, subject to duty on manufacture, and the person at whose premises the goods are employed is bridged by various independent links that were subject to other taxes on sale and purchase renders such visiting of arbitrary conferment of responsibility with harsh, and, at times, disproportionate, consequences. More so, as the statutory provisions do provide for alternative intent of non-retail supply without providing for acceptable manifestation of intent. In the circumstances, the presumption that there has been any intent to evade duty becomes tenuous. 7. The issue of the method of assessment to be adopted is yet to attain finality. That the Hon ble Supreme Court has considered it necessary, in State of Maharashtra v. Subhash Arjundas Kataria [2012 (275) ELT 289 (SC)] to have the matter considered by a Larger Bench would imply that the controversy is not free of any doubt. The tagging of the dispute arising from the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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