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CX - 'Dummy' fan cleared for display at depot is no different from normal electric fan which are sold by valuing u/s 4A - no exemption under SWAM Act from affixing RSP - goods rightly valued u/s 4A: CESTAT

By TIOL News Service

MUMBAI, JAN 10, 2017: THE appellant is engaged in the manufacture and sale of electric fans through their depots. Valuation of these goods is done in terms of Section4A of CEA, 1944.

The appellants had also cleared some numbers of fans to their depots describing it as "dummy fans" in their invoice.

The department was of the view that the fans being a "dummy" fan, the valuation thereof should be in terms of Section 4 and not Section 4A of CEA, 1944.

A differential duty demand was confirmed by the adjudicating authority and the said order was upheld by the Commissioner (Appeals),leading to the present appeal.

The appellant submitted that the "dummy fans" were cleared for being displayed at the depots and after some time the same are sold in the same manner as other fans. Inasmuch as except the terminology "dummy" mentioned in the invoices, nature of the goods sold does not get altered. Therefore, the so-called "dummy" fans were rightly valued in terms of section 4A of CEA, 1944.

The AR reiterated the findings of the impugned order and submitted that since the dummy fans are not fans that are sold in the market in normal course, therefore, the valuation under Section 4A will not apply.

The Bench observed -

"4. …We find that the Revenue could not bring any material on records which shows that the electric fan cleared by the appellant to their depots by pre-fixing description 'dummy' fan is different from the normal electric fan which are valued under Section 4A. Further as per the submission of the appellant the "dummy" terms was given to certain quantity of fans only to give identity that same is for display purpose. However the same is subsequently sold in the same manner as other fans are sold. Therefore, as far as the manner of transaction of other fans and dummy fans there is no difference. We also find that there is no exemption under the Legal Metrology Act from affixing the retail sale price on such clearance. Therefore in our considered view, there is no reason why the electric fan cleared by appellant by prefixing dummy should be given different treatment for valuing under Section 4. In our considered view, the electric fans in question are also liable to be valued under Section 4A of Central Excise Act, 1944…"

The impugned order was set aside and the appeal was allowed.

(See 2017-TIOL-81-CESTAT-MUM)


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