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TMI Blog2024 (9) TMI 1490X X X X Extracts X X X X X X X X Extracts X X X X ..... tampering with, obliterating or altering the retail sale price declared on the package of such goods after their removal from the place of manufacture, in respect of clearances made prior to 01.03.2008, on which datethe Central Excise (Determination of Retail Sale Price of Excisable Goods) Rules, 2008 came into force'. It is apparent that the interim order removes the doubts raised by this bench with respect to the decision in case of Acme Ceramics. Consequently, the earlier decision of Tribunal in the case of Acme Ceramics becomes a binding precedent decision that needs to be followed in the instant case. Consequently, following the decision in case of Acme Ceramics the matters are disposed of in identical terms - the demand for the period prior to 01.03.2008 are set aside as also the penalty imposed on the manufacturer assessee and other individuals. For the period post 01.03.2008, the demands are set aside and matters remanded back to the adjudicating authority to reconsider the same. - Excise Appeal No. 235 of 2008- DB Excise Appeal No. 1282/2009 Excise Appeal No. 1283/2009 Excise Appeal No. 1293/2009 Excise Appeal No. 10341/2013 Excise Appeal No. 10342/2013 Excise Appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eir factory premises. It is also undisputed that the appellant assessees are selling their final product ex-factory and the transportation arrangements are made by the purchasers themselves. 10.1 The entire case of the Revenue as adjudicated by the lower authorities has confirmed the demand based upon the evidences such as the statements of various dealers who had stated that the tiles which are manufactured and cleared by the appellant are sold at a price more than the MRP/RSP declared on such tiles; statements of various shroffs/angadiyas who had stated that the appellants were handed over an amount in cash which were collected from various dealers and that the appellant-assessee have increased their prices of the final product after the massive investigation which was carried out; application of weighted average and redetermination of RSP is permissible even prior to 1-3-2008 and post-1-3-2008. 11. For the period prior 1-3-2008 as well as post-1-3-2008, the basic statutory provision which needs to be considered by us are the provisions of Section 4A of the Act and the provisions of Section 2(g) and 2(h) of the Act which are reproduced herein below :- Section 4A : Valuation of ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... age, 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. Section 2. Definitions. - In this Act, unless there is anything repugnant in the subject or context, - (f) manufacture includes any process - (i) incidental or ancillary to the completion of a manufactured product, (ii) which is specified in relation to an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... preamble to the Notification No. 13/2008-C.E. (N.T.), Central Government made the rules as applicable for sub-section (4) of Section 4A w.e.f. 1-3-2008. In the cases in hand, for the period prior to 1-3-2008, the entire exercise of the Revenue in redetermining the RSP, even if RSP is not in accordance with the law, is faulty and not in accordance with the law, as prescribed manner of redetermination of RSP was brought into statute only from 1-3-2008. We find that once the Central Government has not framed the rules for redetermining the RSP in a case where the RSP declared on the package was sought to be rejected, though being empowered, authorities had no power to redetermine the RSP in any manner; more so in a manner adopted in these appeals. It is also provided in the statute, that as per sub-section (4) of Section 4A of the Act, the manner has to be prescribed only by the Central Government by rules, which came into force only from 1-3-2008, which would also indicate that the provisions of Section 4A(4) could not have been operationalised, till the manner for ascertaining the RSP was prescribed by framing the rules. In the absence of any rules for re-determination of RSP, the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Gazette. (3) The Central Government may, for the purpose of allowing any abatement under sub-section (2), take into account the amount of duty of excise, sales tax and other taxes, if any, payable on such goods. (4) Where any goods specified under sub-section (1) are excisable goods and the manufacturer - (a) removes such goods from the place of manufacture, without declaring the retail sale price of such goods on the packages or declares a retail sale price which is not the retail sale price as required to be declared under the provisions of the Act, rules or other law as referred to in sub-section (1); or (b) tampers with, obliterates or alters the retail sale price declared on the package of such goods after their removal from the place of manufacture, then, such goods shall be liable to confiscation and the retail sale price of such goods shall be ascertained in the prescribed manner and such price shall be deemed to be the retail sale price for the purposes of this section. Explanation 1 For the purposes of this section, retail sale price means the maximum price at which the excisable goods in packaged form may be sold to the ultimate consumer and includes all taxes, local o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Central Government prescribed a procedure to be followed for re-determination of RSP and MRP in case where assessee has collected an amount in excess of the RSP/MRP declared. This re-determination has to be done, failing which the RSP/MRP cannot be revised by the authorities. We find that the C.B.E. C. vide Circular No. 334/1/2008-TRU, dated 29-2-2008 made it clear that the MRP Valuation Rules are effective from 1-3-2008. This would indicate that prior to 1-3-2008, there was no procedure to revise the MRP and demand the duty even though there being a provision under sub-section (4) of Section 4A of the Central Excise Act, 1944. In the absence of any legal machinery during the relevant period, re-determination of RSP/MRP by the Department is without any authority of law. We find that in the case of Millennium Appliances India Ltd. v. CCE, Hyderabad [2009 (248) E.L.T. 713 (Tri. - Bang.)], this Bench on this point has held as under :- 9. Another issue involved in this case is regarding the situation that arises where there are no clear cut statutory provisions to arrive at the value. We find that strong force in the contentions raised by the appellants on the provisions of Section 4A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be taken as the retail sale price of such goods : (ii) if the retail sale price cannot be ascertained in terms of clause (i), the retail sale price of such goods shall be ascertained by conducting the enquiries in the retail market where such goods have normally been sold at or about the same time of the removal of such goods from the place of manufacture : Provided that if more than one retails sale price is ascertained under clause (i) or clause (ii), then, the highest of the retail sale price, so ascertained, shall be taken as the retail sale price of all such goods. Explanation - For the purposes of this rule, when retails sale price is required to be ascertained based on market inquiries, the said inquiries shall be carried out on sample basis. RULE 5. Where a manufacturer alters or tampers the retail sale price declared on the package of goods after their removal from the place of manufacture, resulting into increase in the retail sale price, then such increased retail sale price shall be taken as the retail sale price of all goods removed during a period of one month before and after the date of removal of such goods : Provided that where the manufacturer alters or tampers t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... could not be done by adjudicating authority in the absence of any rules or authority under the section, the demand is not sustainable. We find that in paras 55 and 57, the adjudicating authority has recorded a finding which is as under :- 55 Thus, in this case, the suppression of turnover is admitted and can be either on account of undervaluation or on account of volume. 57 .. As the suppressed turnover is in value terms only, no enquiry need be made for establishing the turnover to the use of raw materials etc. The suppressed turnover, being the excess collection over and above the recorded value or income in their books, is related to the sale value which escaped assessment under the Central Excise Act. Once the suppressed turnover is admitted beyond any doubt and the assessee opts to accept the tax liability under the Income-tax Act, no meaningful purpose would have been served to cause further detailed probing under the Central Excise Act and Rules. 14. We find that the above said findings recorded by the adjudicating authority are directly in conflict of the law which has been settled by the higher judicial fora as regards the confirmation of demand of the duty on an assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t view from the views already existing. On perusal of the said decision of Apex Court in the case of M/s. Mahim Patram Pvt. Ltd., we find that the Apex Court was dealing with a dispute wherein in the absence of rules having been prescribed under the Central Sales Tax for determining the manner in which the sale price of transfer of goods under Works Contract was to be calculated, would the levy of Works Contract be sustainable in the State of Uttar Pradesh by computing the value of taxable turnover in accordance with the rules framed under Uttar Pradesh Trade Tax Act, 1948. The Apex Court while dealing with the issue noted that Central Sales Tax Act, 1956 provides that the authority who is empowered to assess, re-assess, collect, and enforce payment of any tax under General Sales Tax law of the appropriate state, shall on behalf of the Government of India, assess, re-assess, collect and enforce payment of tax under the Central Sales Tax Act and for this purpose, they may exercise all or any of the powers they have under the General Sales Tax law of the State; Section 3(3) of the Central Sales Tax provides that State Government may make rules not inconsistent with the provisions of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ascertain who has changed the said MRP. In our view, the person who has altered the RSP on the goods is the person who can be held as a manufacturer on alteration of RSP; as the definition of manufacturer in Section 2(f) of the Act (hereinbefore reproduced) specifically talks about the process of declaration or alteration of RSP on the product which are covered under the provisions of Section 4A of the Act would be considered as a manufactured product. As stated hereinabove, it is the case of the Revenue that there was an alteration of the MRP, there is nothing on record which indicates that the appellant-manufacturers herein are the persons who have altered the MRP in godown/places of the dealers. The dealers whose statements were recorded by the Revenue authorities state that they have sold the goods at a higher price than the price at which goods were cleared from factory premises of the appellants. We are unable to understand the investigating authorities mind, as during the course of investigation there is a specific admission of the dealers that they have sold the goods at higher MRP than the declared MRP; no question was put any of the dealers as to who altered the RSP decla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urer; or manufacturer was instrumental to order such a charge. In the absence of any contrary evidence, we have to take an adverse inference against the Revenue. 17. On this factual matrix also, we are of the view that Revenue s case is unsustainable for the demand of duty from the appellants. 18. As regards the demand of duty for the period post-1-3-2008 in all these cases even though it has been contended that the demand for this period is un-sustainable, both on facts (as there is no evidence to show that RSP declared on the package was false to the knowledge of the manufacturer) as also in law (though the rules have been framed for determination of RSP, the demand has not been computed in the manner prescribed in rule), we are of the view that the Department ought to be given an opportunity to compute the demand in terms of the rules, if they come to a conclusion that the declared RSP was false to the knowledge of manufacturer. It appears from the examples quoted in the written submissions that even if the Department s theory of cash consideration flowing back was assumed to be correct, even then the total consideration earned by the manufacturer even after including the other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Larger Bench on the following grounds: 9 In view of above this matter may be placed before the Hon ble President for constitution of a larger bench to examine the following questions of law 1) In the facts and circumstances of the case and in view of the contrary precedent decisions of tribunal in the cases of ACME (Supra) and in case of SCHNEIDER ELECTRICAL INDIA (P) LTD (Supra), is it permissible to ascertain RSP for the purpose of assessment under Section 4A of CEA, 1944, in respect of clearances made prior to issue of notification 13/2008-CE(NT) dated 1-3-2008 ? 2) If yes, can it be done by using best judgment method, based upon material available and in a manner consistent with principles and provisions of Section 4A of the Central Excise Act, 1944, including the principles and provisions incorporated in the Central Excise (Determination of Retail Sale Price of Excisable Goods) Rules, 2008 ? Subsequently, while deciding the application filed for rectification of mistake in the order dated 10.01.2019 of division bench, division bench of Ahmedabad Tribunal referred the following additional questions to be decided by Larger Bench. 3. Subsequently, while deciding an application fi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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