Customs, Excise and Gold Tribunal - Delhi
Gillette India Ltd. And G.S. ... vs Cce on 10 August, 2005
Equivalent citations: 2005(192)ELT714(TRI-DEL)
ORDER C.N.B. Nair, Member (T)
1. The appellant in these appeals is a manufacturer of razors and razor blades in India. A part of the produce is also exported to Nepal. The present case relates to export goods.
2. The appellant paid excise duty on the export consignments after assessing them to duty at export sale prices. Thus, valuation of export goods was in terms of Section 4 of the Central Excise Act. Razor blades are specified under Section 4A of the Central Excise Act. The consignments cleared for home consumption in India were being subjected to duty passed on the MRP printed on the packets, in terms of Section 4A. Under the impugned order, excise authorities have held that the consignments exported to Nepal should also be valued in terms of Section 4A, that is based on their MRP. The present appeals challenge this finding.
3.The contention of the Senior Counsel for the appellant is that Section 4A is attracted only to cases where goods are statutorily required (under the provisions of Standards of Weights and Measures Act) to be marked with maximum retail price (MRP). It is the learned Senior Counsel's submission that export goods being outside the purview of the marking of MRP, revenue authorities were misdirected in holding that Section 4A is applicable to the valuation of export consignments. He has taken us through the provisions of the requirements under The Standards of Weights and Measures Act and the Rules and has relied in particular on Rule 30 which relates to EXPORT AND IMPORT of PACKAGED COMMODITIES. It is being pointed out that the requirement of marking price is significantly absent under this rule. Rule 31 of the Standards of Weights and Measures (Packaged Commodities) Rules provides that every export package shall comply with the laws and regulations in force in the country to which such package is intended to be exported. It is the learned Senior Counsel's contention that since no legal requirements of marking retail price in Nepal have been invoked by the revenue authorities, this rule is of no assistance to the revenue.
4. Learned SDR has taken us extensively to the findings in the impugned order and has pointed out that the finding of the learned Commissioner (Appeals) is in conformity with the supplementary instructions of the Central Board of Excise and Customs. In particular, reference is being made to para 4.1. We may read that para.
"4.1.The goods shall be assessed to duty in the same manner as the goods for home consumption. The classification and rate of duty should be in terms of Central Excise Act, 1944 read with any exemption notification and/or the said Rules. The value shall be the 'transaction value' and should conform to Section 4 or Section 4A, as the case may be, of the Central Excise Act, 1944. It is clarified that this value may be less than, equal to or more than the F.O.B. value indicated by the exporter on the Bill of Export."
It is the learned SDR's submission that these instructions stipulate that export goods to Nepal shall be assessed to duty in the same manner as the goods for home consumption. It is being contended that since the consignments in question would have been valued under Section 4A if they were for home consumption, the valuation of export consignments to Nepal should also be under the same legal provision.
5. The dispute in the present case is purely legal in character. The issue that arises is whether the valuation of export consignment should be done under Section 4 or Section 4A of the Central Excise Act. Section 4 is the main section in the statute for valuation of the goods. Provisions in Section 4A constitutes an exception. That exception is in regard to specified goods "in relation to which it is required, under the provisions of the Standards of Weights and Measures Act (60 of 1976) or the rules made thereunder or under any other law for the time being in force, to declare on the package thereof the retail sale price of such goods". Section 4A(1) states that "provisions of Sub-section (2) shall apply" only to the aforesaid goods in relation to which it is a statutory requirement that retail sale price be declared on the package. Sub-section (2) of Section 4A stipulates that "where the goods specified under Sub-section (1) ..., then notwithstanding anything contained in Section 4, such value shall be deemed to be retail sale price declared on such goods". It is thus, clear from the language of the Section that the very first requirement to attract valuation under Section 4A is that goods must be the ones which are required under the provisions of Standards of Weights and Measures Act to carry marking of retail sale price on their package. As has been correctly pointed out by the learned Senior Counsel, Rules under the Standards of Weights and Measures Act, 1976 specifically exclude export consignments from the requirement to mark retail sale price. In view of this legal position, valuation of export consignments cannot be in terms of Section 4A.
6. Now, the question that remains is whether the supplementary instructions of the Board is contrary to this provision or whether those instructions are also in terms of the provisions of law. We have already reproduced the relevant para. It is being noted that, with regard to valuation, it is specifically stated that value shall be transaction value and shall conform to Section 4 or Section 4A, as the case may be, of the Central Excise Act, 1944. Thus, those instructions also contemplate assessment under transaction value. The only thing to be seen is whether transaction value is in terms of Section 4. In the present case, revenue has no case that transaction value is not in conformity with the Section 4. No case has been taken that the export price is not a commercial price. It is also noted that instructions of the Board are the same in regard to assessment of goods exported to other countries also.
7. Another relevant point is that Sub-section (4) of Section 4A contains provisions relating to violation of the provisions of section 4A. It stipulates that "if any manufacturer removes from the place of manufacture any excisable goods specified under Sub-section (1) without declaring the retail sale price of such goods on the packages..., such goods shall be liable to confiscation." Since the export goods are exempt from declaration of retail price under the Standards of Weights and Measures Act or the Rules, exporters would tend to clear them without affixing retail price. If a view is taken that Section 4A is attracted to export consignments also, such consignments on which retail price is not declared would become liable to confiscation, making exports well-nigh impossible. Therefore, the reasonable view can only be that export consignments are required to be valued in terms of transaction value under Section 4 and not in terms of Section 4A, even if the goods under export are specified under Section 4A(1) of the Act. In this connection, we also note that the scope of assessment under Section 4A had been clarified by the CBEC vide Circular No. 411/44/98-CX dated 31.7.98 and Circular No. 625/16/02-CX dated 28.2.2002. A common position in both the circulars is that Section 4A applies only when there are statutory requirements for affixing MRP and not in the case of other goods. We read para 2 of Circulars:
"2. Instructions were issued by the Board vide Letter F.No. 341/64/97-TRU, dated 11th August, 1997, clarifying that Sub-section (1) of Section 4A applies only when the MRP is required to be indicated under the provisions of Standards of Weights and Measures Act, 1976 or under any other law for the time being in force. In other words, Section 4A applies only where there is statutory of affixing the MRP. Accordingly, in case a manufacturer voluntarily affixes MRP which is not statutorily required then the excise duty on goods in such packings shall not be charged on the basis of Section 4A of the Central Excise Act, 1944.
"2. The matter has been examined. Section 4A of the Central Excise Act, 1944 is applicable in respect of those cases only where the manufacturer is legally obliged to print the MRP on the packages of the goods, under the provisions of the Standards of Weights and Measures Act, 1976 or the rules made thereunder or any other law for the time being in force."
The assesses' contention in the present appeals is in terms of these circulars.
8. In the light of what is stated above, we hold that the duty demands made in the impugned orders are not sustainable. The impugned orders are set aside and the appeals are allowed with consequential relief, if any, to the appellant.