Custom, Excise & Service Tax Tribunal
Cce Kolhapur vs Godrej &Amp; Boyce Mfg. Co. Ltd on 12 October, 2018
IN THE CUSTOMS, EXCISE AND SERVICE TAX
APPELLATE TRIBUNAL
WEST ZONAL BENCH AT MUMBAI
APPEAL NO: E/221/2010
[Arising out of Order-in-Appeal No: P-II/PAP/223/2009 dated 26th
October 2009 passed by the Commissioner of Central Excise
(Appeals), Pune - II.]
For approval and signature:
Hon'ble Shri C J Mathew, Member (Technical)
Hon'ble Shri Ajay Sharma, Member (Judicial)
1. Whether Press Reporters may be allowed to see the
Order for publication as per Rule 27 of the : Yes
CESTAT (Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of
CESTAT (Procedure) Rules, 1982 for publication : Yes
in any authoritative report or not?
3. Whether Their Lordships wish to see the fair copy
: Seen
of the Order?
4. Whether Order is to be circulated to the
: Yes
Departmental authorities?
Commissioner of Central Excise
Kolhapur ... Appellant
versus
Godrej & Boyce Manufacturing Co Ltd ...Respondent
Appearance:
Shri DS Chauhan, Superintendent (AR) for appellant. Shri A Hidayatullah, Senior Advocate with Shri Makrand Joshi, Advocate for respondent E/221/2010 2 CORAM:
Hon'ble Shri C J Mathew, Member (Technical) Hon'ble Shri Ajay Sharma, Member (Judicial) Date of hearing: 12/06/2018 Date of decision: 12/10/2018 ORDER NO: A/87616 / 2018 Per: C J Mathew Revenue has impugned before us order-in-appeal no. P II/PAP/223/2009 dated 26th October 2009 of Commissioner of Central Excise (Appeals), Pune-II which, while deciding the appeal of M/s Godrej & Boyce Mfg Co Ltd against the order of the original authority for recovery of differential duty by including 'optional service charges and 'rustproof protection charges' in the 'maximum retail price' for assessment, has taken a contrary view. From the records, it appears that seven show cause notices for the period from September 2004 to March 2005 had proposed recovery of ₹ 26,70,342. The confirmation of duty liability was disputed before the first appellate authority on grounds of denial of principles of natural justice causing the matter to be re-heard by the original authority.
2. Learned Authorised Representative urged us to accept the grounds of appeal preferred by the competent reviewing authority. It E/221/2010 3 is submitted that the option for coverage under the two facilities is offered along with the goods and are included in the warranty; that the invoice raised by the dealer on the consumer does not segregate these charges from the cost of the product; that the explanation in section 4A of Central Excise Act, 1944 does not restrict the charges that are to be included for the purposes of assessment and that a contrary order of Commissioner of Central Excise, Pune-II dated 7th February 2007 should have, in the interest of consistency, been followed by the first appellate authority in the present dispute.
3. Learned Senior Counsel appearing for respondent contends that the two offerings are optional and become operational only upon expiry of the initial mandatory warranty period; that these can be opted out of at any stage would take them out of the purview of costs includible in 'maximum retail price' according to Learned Senior Counsel.
4. Learned Authorised Representative had cited the decision of the Tribunal in Godrej & Boyce Mfg Co Ltd v. Commissioner of Central Excise, Mumbai-II [2011 (273) ELT 585 (Tri-Mumbai)] on the inclusion of the very same charges in the assessable value. The applicability of the finding of the Tribunal to the effect that '2. The facts of the case are that the appellants are the manufacturer of Refrigerators and Washing Machines and E/221/2010 4 clearing their goods to various depots located all over the country. The goods are to be charged Central Excise duty on the basis of MRP under Section 4A of Central Excise Act, 1944 after allowing the applicable abatement under Notification No. 41/2003 dated 1-4-2003. On the basis of intelligence that the appellants are collecting charges described by them as OSC and RPP separately over and above the MRP of the product and thereby they were altering the MRP thereby under valuation of MRP and short paying duty, the factory was visited and records were scrutinised. After scrutiny of the records, it was alleged that the appellants are charging OSC and RPP over and above the MRP of the product through separate invoice and show-cause notice was issued which was adjudicated and impugned demands were confirmed. Aggrieved by the said orders the appellants are in appeals before the Tribunal.
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8. To sum up the above mentioned discussion we find that the facts of this case are distinguishable from the case of Electrolux Voltas Ltd. (supra) as discussed herein above and when the goods have been cleared to the customers/ultimate buyers through a consolidated invoice which includes the price of the product plus OSC/RPP. Therefore, we hold that the goods have been sold over and above the MRP, therefore, the OSC/RPP are includable in the assessable value. With these findings we do not find any reasons to interfere with the impugned orders and the same are upheld. Appeals filed by the appellants are rejected.' is contested by Learned Senior Counsel. Likewise, he contends that reliance cannot be placed on the decision of the Tribunal in Videocon E/221/2010 5 Industries Ltd v. Commissioner of Central Excise, Aurangabad [2016 (335) ELT 778 (Tri-Mumbai)].
5. The Tribunal, while deciding the dispute in re Godrej & Boyce Mfg Co Ltd, upheld the includability of the two charges in the 'maximum retail price' because of the inability on the part of the assessee to evidence their costing record and in the face of consolidation of charges in the customer invoice. In the present instance, Learned Senior Counsel points out that it is not in dispute that consolidated prices in the invoice raised by the dealers would differ according to exercise of option for coverage. It is also clear that the earlier decision of the Tribunal had been handed down in the context of recovery made by the dealer in excess the 'maximum retail price' that was statutory to be declared on the packing of the goods on which the additional duty liability was held to be collectible. Such an allegation is not found in the present proceedings. There is no allegation that the 'maximum retail price' on the goods involved in the present dispute was, in any way, altered by the dealer to justify the invoking of the provisions for recovery of differential duty. The decision of the Tribunal in re Videocon Industries Ltd deals with exclusion from the 'maximum retail price' allowed on certain specific charges over and above the abatement permitted in the notification issued under section 4A of Central Excise Act, 1944. It clearly follows that the present dispute is distinguishable from the facts E/221/2010 6 pertaining to the two decisions cited by Learned Authorised Representative.
6. The levy of duty under section 4A of Central Excise Act, 1944 is necessarily to be on the 'maximum retail price' marked on the package subject to permissible abatement. There is no evidence that, in the present proceedings, the marked price had been altered at any stage subsequently. There is, thus, unlike the facts pertaining to the decision of the Tribunal supra in the respondent,s own case, no requirement to ascertain from costing records which, not being available, led to confirmation of duty liability. There is also no allegation that the two charges are contractually fastened on every purchaser of the goods manufactured by the respondent. To the extent that the coverages remain optional, it cannot be said that the 'maximum retail price' should include such charges.
7. In the light of the above facts and circumstances, we find that the impugned order cannot be faulted and that the appeal of Revenue is without merit. Accordingly, we dismiss the appeal.
(Pronounced in Court on 12/10/2018)
(Ajay Sharma) (C J Mathew)
Member (Judicial) Member (Technical)
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