By TIOL News Service

NEW DELHI, OCT 21, 2015: THE period of dispute is 01.06.2006 to 31.12.2008 and from 01.01.2009 to 31.09.2010. During the impugned period, the appellant was clearing automobile parts in the following manner:-

a) To Automobile manufacturers as original equipment parts in loose condition on which duty was being paid on transaction value under section 4 of the Central Excise Act 1944.

b) To Spare parts division of automobile manufacturers in packings containing 1 to 10 pieces and on which as per the instruction of manufacturers labels mentioning the MRP and other particulars like manufacturer name, part no. etc., were being affixed and duty on the same has been paid on the value determined under section 4A of the Act; and,

c) To wholesale dealers, goods were being sold in boxes of 100 pieces each and on which duty was paid on transaction value u/s 4 of the Central Excise Act 1944.

Revenue is okay with the manner of valuation in respect of the categories (a) and (b) mentioned above but is sore with the third category.

SCNs were issued demanding differential duty by adopting the valuation in terms of s.4A of the CEA as automobile parts are notified goods.

The lower authorities confirmed the duty demands and, therefore, the assessee is before the CESTAT.

After considering the exhaustive submissions made by both sides, the Bench extracted the definitions of 'wholesale package' as contained in rule 2(x); 'multi-piece package' - rule 2(j) and the declaration to be made on the wholesale packages as laid down in rule 29 of the PCR, 1977 and observed -

"13...As per the above definition of multi piece packages and the definition of wholesale packages, we find that sub clause 2(x) is applicable to the facts of this case, as the fasteners are sold by the appellant to wholesaler in bulk enabling the wholesaler to sell, distribute or deliver such fastener to the consumer in smaller quantity. As the fastener is cleared by the appellant to the wholesaler in bulk, we are of the considered view that the appellant are clearing their goods in wholesale packages, after analyzing the definition of wholesale package as defined under Rule 2(x) of the Standard of Weights and Measures (Packaged Commodities) Rules, 1977. We also find that Rule 29 (ibid) specifies that on wholesale packages the declaration to be made by the assessee and as per the said Rule there is no requirement to declare retail sale price. Therefore, we hold that appellant are not required to declare retail sale price on wholesale packages."

Adverting to the decision in Jayanti Food Processing (P) Ltd. - 2007-TIOL-150-SC-CX   wherein the apex court has laid down the guidelines for valuation of the goods under section 4A of the Act, namely that there should be required in SWM Act or Rules made thereunder or any other law to declare the price of such goods relating to their price on the packages, the CESTAT concluded that as per Rule 29 of the said rules the appellants were not required to affix MRP on the product which were cleared as wholesale packages, and, therefore,the appellant had correctly valued their goods sold to the wholesaler in wholesale packages i.e. on transaction value.

The appeals were allowed with consequential relief, without going into the issue of limitation.

(See 2015-TIOL-2257-CESTAT-DEL)