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TMI Blog2004 (3) TMI 111X X X X Extracts X X X X X X X X Extracts X X X X ..... to discard the said maximum retail price. The explanation defining the retail sale price in the above notification refers to the maximum retail price on which the excisable goods may be sold to the ultimate consumer and does not refer to the price which is actually charged from the customers and which may be on the lower side. As such, we do not find any justification in the above stand of the revenue. We agree with the appellants contention that the six instances cannot be made the leading evidence so as to conclude that the appellants was charging more price from their customers than the one declared by them especially when there are around 12,000 dealers of Kitchen Appliance all over the country and there are no other circumstances showing that the invoices were raised at higher price. The appellants have contended that dealers also sold antennae, voltage stabilizer etc. and may offer optional delivery at the customers end and installation at their premises, in which case the higher charges would stand justified. As such, it cannot be said that the appellants have sold the T.V. set at a higher price than the declared maximum retail price. By applying ratio of the decision in [ 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ared retail sale price. Thus, we allow the appeal filed by M/s. Videocon International Ltd. and reject the appeals filed by the Commissioner against M/s. Videocon International Ltd. and M/s. Kitchen Appliances India Ltd. We make it clear at this point that since the appeals are being allowed on the main issue itself we are not considering the other alternative appeals raised by as regards the quantification of the demand and the applicability of the notification in question w.e.f. 1-8-1995. In a nutshell appeals filed by the manufacturers are allowed with consequential relief to them and the appeals filed by the Revenue are rejected. - Smt. Archana Wadhwa, Member (J) and Shri Moheb Ali M., Member (T) [Order per : Archana Wadhwa, Member (J)]. - All the appeals were heard together and are being disposed off by a common order. We first take up the following set of three appeals as the issue involved is common. Appeal No. E/2422/2001-Mum.; E/2423/2001-Mum. and E/2747/2001-Mum : 2.As per the facts on record M/s. Videocon Communication Ltd. are a manufacturer of Colour T.V. sets classifiable under Chapter Heading No. 85.28 of the Schedule to the Central Excise Tariff Act, 1985. During ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5/98, dtd. 2-6-1998, the maximum price at which the goods are sold to the ultimate consumer and where the price is the sole consideration of the same, would constitute retail sale price. Inasmuch as the appellants have collected security deposit over and above the R.S.P. declared by them, the same is not the sole consideration for sale and ad valorem duty as prescribed under sub-Sr. No. (i) of Sr. No. 229 of notification will not apply and the appellants are required to pay duty at the specific rates in terms of the sub-Sr. No. (ii) of the notification. Other Show Cause Notice dtd. 1-1-1998 was issued proposing demand of duty on the identical ground for the period 1-8-1998 to 30-11-1998. 5.The above Show Cause Notices were adjudicated upon by the Assistant Commissioner vide his order-in-original dtd. 16-2-2000 confirming demand of duty of Rs. 3,09,83,111/- (Rs. Three Crores Nine Lakhs Eighty Three Thousand One Hundred Eleven only) as proposed in the notice and also imposed personal penalty of Rs. 75,00,000/- (Rs. Seventy Five Lakhs only) on M/s. Videocon International Ltd. under the provision of Rule 173Q. The said order of the Assistant Commissioner was challenged by the appellan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... company may not repay the amount after the expiry of the fix period is without any basis inasmuch as even in those conditions the legal effect of the promissory note would not change. It has been strongly contended before us that deposit is only a condition for sale of the T.V. and not a consideration for the same. Our attention has been drawn to various well-known books showing the difference between 'consideration' and 'condition'. Reliance has also been placed upon various decisions which we shall be discussing at a later stage. It has further been argued that even non-return of the amount specified in the promissory note cannot be termed as consideration for sale as held by the Hon'ble Supreme Court in the case of United Breweries. 8.Learned Advocate has submitted that the said scheme was floated by the appellants to attract the customer in the competitive word of Television and inasmuch as the appellants are paying higher rate of interest to their buyers than the market rate, they are not benefited by the scheme. As such, neither the deposit nor the notional interest on the said deposits can be an additional consideration for the T.V. Further the question as to whether the de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elied upon Board's Circular which has been given in different set of circumstance and is applicable only where the T.V. sets are sold under exchange scheme and duty is paid on the retail sale price affixed on their packages. Inasmuch as the maximum retail price in those cases is not the sole consideration and the value of the old T.V. is also a consideration to the T.V. manufacturer, the Board issued the above circular. In their case the situation is not identical. As such, according to the learned Advocate the amendment of the notification effective from 2-6-1998 will not make any difference. Learned Advocate has also placed on records two orders passed by the Commissioner of Central Excise (Adjudication), New Delhi and by Commissioner of Central Excise (Appeals) in case of manufacture of Videocon brand of T.V.s dropping the demand raised on identical issues. He submits that as per his knowledge, the said orders have not been appealed against by the Revenue. 12.Shri Umashankar, learned SDR appearing for the Revenue has drawn our attention to the allegation made in the Show Cause Notice and confirmed in the order-in-original which has specifically stated that the various dealers of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notified by the Central Government for the purpose of this Section; (iii) such goods must also be chargeable to duty based on their value. Upon satisfaction of the above conditions, Section 4A(ii) provides that the value of the notified excisable goods for the purpose of the payment of duty will be deemed to be the retail price declared on such goods less abatement, if any, granted by notification. There is no dispute that the Colour T.V. is one of the notified items under the said section and abatement of 30% from the retail sale price has been granted M/s. Videocon International Ltd. was directly marketing the T.V. sets manufactured by it and M/s. Videocon Communication Ltd. was selling the said T.V. sets to M/s. Videocon International Ltd. who in turn were selling the same to ultimate customers through its Network of dealers. Admittedly all the models of the colour T.V. bore maximum retail price and duty was discharged on the basis of the same after claiming the abatement. With effect from 12-3-1998 the appellant formulated a scheme called 'Money Back Scheme' in respect of five of its models whereunder their customers were required to deposit certain amount as security for a sp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sure is the occasion and not the consideration for the surcharge taken from the race-goer. It is true that but for this insistence on payment of the surcharge at the time of admission to the enclosure, the race-goer might not have paid any amount for local charities. But that does not render the payment of the surcharge involuntary, because it is out of his volition that he seeks admittance, he has to pay not only the price of the admission ticket but also the surcharge for the local charities. The surcharge is clearly not a part of the price for admission but it is a payment made for the specific purpose of being applied to local charities." By observing so, it has been held that the surcharge is clearly not a part of the price for admission but it is a payment made for the specific purpose of being applied to local charity. 17.We also take note of the Supreme Court decision in the case of R.S. Joshi reported in 1977 (4) SCC 98 wherein while dealing with the sales tax provision it was observed that the expression "collected" means "collected and kept as his" by the trader. If the dealer merely gathered the same by way of tax and kept in as suspense account because of dispute about ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... converted into the consideration of sale of T.V. does not impress us inasmuch as it is not denied that the appellants had issued promissory note to their customers. The legal effect of existence of such promissory note cannot be ignored. The appellants are under a legal obligation to repay the amount to the customers. As such, whether the same is actually paid or not, the legal effect of the transaction cannot be ignored. Even presuming that appellant's customers do not approach them for return of money at the end of the day or for one reason or other the appellants do not pay the promised amount to the customers, the customers are at liberty to take legal action against the appellants in a Court of law and the said fact by itself will not change the colour of the transaction from being one of a legal nature to that of a consideration for sale of the T.V.s. The suggestion of the learned SDR that in case the said deposit has actually been returned, the same may not be added in maximum retail price of the T.V. but the same should be a part of the assessable value of the T.V. where it has not been returned, does not appeal to us inasmuch as it is legal character of the entire transact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ofit of the company, till character of the receipt will not change. The deposits as such in our view cannot be considered as the sale price of the goods. 20.We may also take note of the Hon'ble Supreme Court decision in the case of Commissioner of Income Tax v. Bijli Cotton Mills (P) Ltd. - 1979 (1) SCC 496, relied upon by the appellant, where compulsory payments realized by the assessee for 'Dharmada' from customers purchasing goods were held not to be trade receipts forming part of the price or surcharge on the price of the goods and hence not income in the nature of trade receipts. Though the amount of 'Dharmada' is a payment which a customer is required to pay in addition to the price of the goods, the purchase of the goods is only an occasion and not the consideration. It is true that without payment of 'Dharmada' amount the customer may not be able to purchase the goods from the assessee, but that would not make the payment involuntary inasmuch as it is out of his own volition that the customer purchases the goods from the assessee. The fact that such amount was not actually spend for charity but was kept in the 'Dharmada account' will not turn them into part of consideration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as the retail sale price printed on their packages does not reflect the price charged as the sole consideration for sale of the T.V.s. As is clear, the above circular is applicable only where the T.V. set are sold under exchange scheme, inasmuch as in that case there is a additional consideration flowing back to the manufacturers in the shape of value of the old T.V. In the instant case there is no such profit to the appellants out of the deposit inasmuch as such deposit are being returned to the customers along with interest, which interest rate is much higher than the market or bank rate. 22.For the above reasons, we hold that the maximum retail price or retail sale price affixed by the appellants on the colour T.V. sets is the correct value in terms of the provisions of Section 4A and the duty liability has been discharged correctly. As we are of the view, that no demand of duty is sustainable against the appellants, no penalty can be imposed upon them and has been rightly set aside by the Commissioner (Appeals). Accordingly, the above two appeals filed by the manufacturers are allowed with consequential relief to them and the appeals filed by the Revenue is rejected. Appeal No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e appearing for the appellants and Shri Uma Shankar, learned SDR for the Revenue. 27.As per the Revenue case made out in the Show Cause Notice maximum retail price declared on the T.V. Sets is not the sole consideration since individual maximum retail price of the said product is lost in the basket scheme and gets influenced by the availability of the other goods when sold under basket scheme. It has been admitted that the said scheme was optional and the customers was at liberty to buy only the Colour T.V. set in which the case they were being charged the maximum retail price affixed on the said T.V. The revenue has quoted statements of two dealers of Aurangabad to the effect that where T.V. sets were being sold individually, the dealers have charged more than maximum retail price affixed on the same in some of the cases and as such the maximum retail price is not genuine. By holding so the revenue has proposed to adopt specific rate under sub-Sr. No. (ii) of Sr. No. 229 of the Notification No. 5/98-C.E., dated 2-6-1998 for each and every T.V. set cleared during the period in question. 28.The appellants have challenged the finding of the authorities below by submitting that it is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n respect of three instances each, they have charged price marginally higher than the declared maximum retail price. We agree with the appellants contention that the six instances cannot be made the leading evidence so as to conclude that the appellants was charging more price from their customers than the one declared by them especially when there are around 12,000 dealers of Kitchen Appliance all over the country and there are no other circumstances showing that the invoices were raised at higher price. The appellants have contended that dealers also sold antennae, voltage stabilizer etc. and may offer optional delivery at the customers end and installation at their premises, in which case the higher charges would stand justified. As such, it cannot be said that the appellants have sold the T.V. set at a higher price than the declared maximum retail price. 32.We find force in the appellant's contention that the six instances cannot be said to be a clinching evidence against the appellant, especially in the fact of denial of cross-examination of the said dealers to the appellants. There is also no averment in the show cause notice that the extra amount collected by the dealer has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tted by the dealer inasmuch as instead of selling the T.V. sets at the maximum retail price he has charged a little higher from the customer. In any case, we have taken note of the facts that the said two dealers, from whom statement have been recorded have not sold all the T.V.s at a higher rate but it is only in respect of three cases per dealer that a higher money has been collected. As rightly argued by the learned Advocate, there may be some circumstance under which the higher amount has been collected, which would have come on surface, if the Revenue would have agreed to allow cross-examination of the said dealers. In any case as already observed by us such, negligible number of instances cannot take the place of affirmative and legal evidence so as to held that the declared price, which has been followed by all other dealers all over the country, was not bona fide. 34.Commissioner (Appeals) has relied upon the Board's Circular dated 23-11-1998 to hold that it is the responsibility of the manufacturer discharging duty liability of T.V. sets to ensure that final price charged from the ultimate consumer is not more than the declared maximum retail price and if found to be charg ..... X X X X Extracts X X X X X X X X Extracts X X X X
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