CX -S 4A - In absence of machinery provisions, invoice price, even though not found to be affixed on product would have to be accepted as RSP: CESTAT
By TIOL News Service
MUMBAI, MAR 12, 2019: A CEX demand of Rs. 16,36,968/- has been confirmed along with imposition of interest and equal penalty.
The order, having been upheld by the Commissioner(A), the appellant is before the CESTAT.
The case is that goods viz. 'coin box telephones' installed in 'public call offices' were being manufactured by M/s Multiplex Electronics for M/s Multivision Electronics Pvt. Ltd who had supplied the components and the duty liability had been discharged on the invoice price.
Revenue had alleged that the clearances effected between November 2003 and March 2004 and again from November 2004 to March 2005 are to be valued in terms of S.4A of the CEA, 1944.
The Bench observed that the matter could be disposed off within the narrow compass of the scope for enhancing assessable value of the said goods under section 4A of Central Excise Act, 1944 during the relevant period.
Reliance is placed by the CESTAT on the decision in Acme Ceramics - 2013-TIOL-2642-CESTAT-AHM wherein it is held that-
"…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…"
The Bench, therefore, held that- "in consequence of the absence of machinery provision during the period of dispute, the assessable value for the purpose of computation of duty, even though not found to be affixed on the product, would have to be accepted as the 'retail selling price'."
Following the said decision the demand was set aside and the appeal was allowed.
In passing:
++ Incidentally, by a Majority decision, the CESTAT, Mumbai had held thus-
CE-Valuation-s. 4A of CEA, 1944-Central Excise (Determination of Retail Sale Price of Excisable Goods) Rules, 2008 is a curative provision to deal with a situation where the RSP is not declared or tampered with-they are entirely procedural in nature and, therefore, retrospective in nature and can be applied to all proceedings which are pending or which arise after the rule has been introduced-MRP of the product can be ascertained by the assessing officer using reasonable/best judgment means based on the material available and consistent with the principles and the provisions of Section 4A of the CEA, 1944 even if rules for ascertainment of the same were not framed earlier and came about later-CESTAT by Majority. [See Schneider Electrical India (P) Ltd. 2014-TIOL-337-CESTAT-MUM]
++ And, in a recent decision in Ocean Ceramics Ltd. & Ors. reported as 2019-TIOL-622-CESTAT-AHM, the Division Bench, Ahmedabad has referred the matter to the 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 - (2014-TIOL-337-CESTAT-MUM), 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?
(See 2019-TIOL-751-CESTAT-MUM)
