By TIOL News Service

MUMBAI, APRIL 04, 2018: THE appellants are engaged in the manufacture and clearance of aerated water.

Apart from retail sale clearances, they also sold aerated water to institutional consumers by assessing the clearances u/s 4A of the CEA, 1944.

The case of the department is that the sale made to institutional consumers is not meant for retail sale, therefore, the valuation of such goods should be done u/s 4 read with Standards of Weights and Measures (Packages Commodities), Rules, 1977. Inasmuch as since the supplies made to institutional consumers do not attract the provisions of any statute which attract mandatory declaration of MRP, the goods ought to have been cleared by resorting to valuation in terms of section 4 of the CEA, 1944.

SCN demanding differential excise duty culminated into adjudication order dated 30.07.2008 whereby the adjudicating authority dropped the proceeding. However, in Revenue appeal, the Commissioner(A) set aside the o-in-o and upheld the CE duty demand.

The assessee is before the CESTAT and submits that although the excisable goods i.e. aerated water was sold to the institutional consumer namely Spicejet but it contains the MRP, therefore, the valuation was correctly done under Section 4A. Reliance is placed on the following decisions in support of the valuation undertaken by the assessee.

(i) Liberty Shoes Ltd. - 2015-TIOL-325-SC-CX

(ii) Nitco Tiles - 2014-TIOL-2092-CESTAT-MUM

(iii) Mexim Adhesive Tapes Pvt. Ltd - 2013-TIOL-837-CESTAT-AHM

(iv) Jayanthi Food Processing (P) Ltd - 2007-TIOL-150-SC-CX

(v) Electrolux Kelvinator Ltd. - 2004-TIOL-976-CESTAT-MUM

(vi) Philips Electronics (I) Ltd. - 2007-TIOL-815-CESTAT-MUM

The AR supported the stand taken by the Revenue.

After considering the submissions, the Bench extracted extensively passages from the orders cited by the appellant and observed –

"…, it can be seen that even though the package of the goods is marked for industrial use but since the goods bore the MRP, Hon'ble Courts have held that the valuation should be done under Section 4A and not under Section 4 of the Central Excise Act, 1944. Following the ratio of the above judgments, we are of the considered view that the valuation adopted by the appellant under Section 4A is correct and legal…"

The impugned order was set aside and appeal allowed.

(See 2018-TIOL-1066-CESTAT-MUM)