Customs, Excise and Gold Tribunal - Mumbai
Videocon International Limited And ... vs Commissioner Of Central Excise And Ors. on 5 March, 2004
Equivalent citations: 2004(167)ELT33(TRI-MUMBAI)
ORDER Archana Wadhwa, Member (J)
1. All the appeals were heard together and are being disposed off by a common order. We first take up the following set of three appeals as the issue involved is common.
Appeal No. E/2422/01-MUM; E/2423/01-MUM and E/2747/01-MUM.
2. As per the facts on record M/s Videocon Communication Ltd. are a manufacturer of Colour T.V. sets classifiable under Chapter Heading No. 85.28 of the Schedule to the Central Excise Tariff Act, 1985. During the period relevant for the purpose of the present appeal the appellants were clearing the T.V.s on payment of duty on the basis of the Maximum Retail Price (hereinafter referred to as M.R.P.) in terms of the Provision of Section 4A(1) of the Central Excise Act, 1944 read with Notification No. 50/97 and 51/97 dtd. 10/09/1997 and subsequently under amended Notification No. 5/98 and 18/98 Dated 02.06.1998. M/s Videocon International Ltd. is the licenced user of the brand name 'Videocon.' Appeal No.E/2423/01 is in respect of the T.V.s manufactured and sold by M/s Videocon communication Ltd. to M/s Videocon International Ltd. Videocon International Ltd. is also engaged in the manufacture of Colour T.V. under its own brand name 'Videocon' and Appeal No. E/2422/01 is in respect of the valuation of the T.V.s manufactured and sold by the said appellant. Revenue's appeal is against that portion of the order of the Commissioner (Appeals) vide which he has dropped the demand for the period prior to 02.06.1998 and has also set aside the entire penalty upon the appellants.
3. With effect from 12.03.1998 appellants floated a scheme under the name and style of the "Money Back Scheme". The said scheme was in respect of five models of the Colour T.V. According to the said scheme, the appellants was collecting a fix amount of Security Deposit alongwith the cost of T.V., which deposit was repayable by the company to the customers after expiry of period of six years or five years depending upon the model, alongwith interest. The company was to issue promissory note to the customers to that effect. The introduction of the said scheme was communicated to the dealers by the appellants vide their letter deted 12.03.1998 and the same was also announced through Newspaper advertisement.
4. The appellants were issued a Show Cause Notice dated 23.09.1998 alleging that for the period 12.03.1998 to 01.06.1998, the appellants has paid the duty on the M.R.P. affixed on the packages but have collected more amount from their customers in the shape of security deposits. Accordingly, the notice alleged that the security deposit amount collected by the appellants from their customer is required to be added to arrive at the total retail sale price. For the period 02.06.1998 onwards the notice alleged that as per the definition of retail sale price contained in the explanation to Notification No. 5/98 dtd. 02.06.1998, the maximum price at which the goods one sold to the ultimate consumer and where the price is the sole consideration of the same, would constitute retail sale price. Inasmuch as the appellants have collected security deposit over and above the R.S.P. declared by them, the same is not the sole consideration for sale and ad valorem duty as prescribed under sub-Sr. No.(i) of Sr. No. 229 of notification will not apply and the appellants are required to pay duty at the specific rates in terms of the sub-Sr. No.(ii) of the notification, Other Show Cause Notice dtd. 01.01.1998 was issued proposing demand of duty on the identical ground for the period 01.08.1998 to 30.11.1998.
5. The above Show Cause Notice were adjudicated upon by the Assistant Commissioner vide his order-in-original dtd. 16.02.2000 confirming demand of duty of Rs. 3,09,83,111/- (Rs. Three Crores Nine Lakhs Eighty Three Thousand One Hundred Eleven Only) as proposed in the notice and also imposed personal penalty of Rs. 75,00,000/- (Rs. Seventy Five Lakhs only) on M/s Videocon International Ltd. under the provision of Rule 173Q. The said order of the Assistant commissioner was challenged by the appellants before Commissioner (Appeals), who vide his impugned order-in-appeal dated 25/05/2001 set aside the duty demand pertaining to the period prior to 02/06/1998. For the period after 02.06.1998 he confirmed the demand of duty by relying upon the Board's Circular dated. 23.11.1998. However, he granted an opportunity to the appellants to produce evidence before the Assistant Commissioner in respect of all instances where customer has not availed of 'Money Back Scheme' and did not pay any security deposit. The Appellate Authority also set aside the entire penalty imposed upon the appellant. The said order of the Appellate Authority is impugned before us by the appellants as also by the Revenue.
6. We have heard Shri V. Sridharan, learned Advocate appearing for the appellants and Shri Uma Shankar, learned S.D.R. appearing for the Revenue.
7. The short point required to be decided in the present set of appeals is as to whether the duty was rightly discharged by the appellant on the maximum retail price affixed on the T.V. packages or the same was required to be enhanced by including the security deposits made by the customers for the period upto 01.06.1998 and thereafter the appellants were required to pay duty at the specific rate by discarding the maximum retail price. The appellants strongly contended that such deposit cannot be considered to be a part of the price of the T.V., inasmuch as the same is refunded by the company to the customer after a fix period alongwigh the interest. The entire amount collected as deposit is shown as a liability in the books of accounts of the company and the same is not income in the hands of the appellant. The appellant's balance sheet show the interest on a year to year basis. The appellants have also produced a Chartered Account certificate confirming the said position. The learned advocate appearing for the appellants submitted that as per the scheme which has been explained in detail to the dealers, vide their letter dated. 12.03.1998, every customer is required to fill a form which clearly stipulates that the customers is making a deposit under the scheme. The appellants have also issued promissory note for each and every deposit to their customer. The legal effect of the existence of promissory notes is that the company is under a legal obligation to repay the promised amount to their customers and the revenue's apprehension that the company may not repay the amount after the expiry of the fix period is without any basis inasmuch as even in those conditions the legal effect of the promissory note would not change. It has been strongly contended before us that deposit is only a condition for sale of the T.V. and not a consideration for the same. Our attention has been drawn to various well-known books showing the difference between 'consideration' and 'condition.' Reliance has also been placed upon various decisions which we shall be discussing at a later stage. It has further been argued that even non-return of the amount specified in the promissory note cannot be termed as consideration for sale as held by the Hon'ble supreme Court in the case of United Breweries.
8. Learned advocate has submitted that the said scheme was floated by the appellants to attract the customer in the competitive word of Television and inasmuch as the appellants are paying higher rate of interest to their buyers than the market rate, they are not benefited by the scheme. As such, neither the deposit nor the notional interest on the said deposits can be an additional consideration for the T.V. Further the question as to whether the deposit is optional or not is irrelevant inasmuch as no distinction has been made under the law on the basis of the optionally.
9. Dealing with the allegation in the Show Cause Notice Shri V. Sridharan has submitted that the Revenue has stated the example of 13 invoices where their dealers have charged more than maximum retail price from their customers. He submits that out of the 53,000 T.V. sets sold during the period in question 13 instances is negligible evidence and in any case the excess amount collected is only marginal. The invoices in question do not show any circumstances under which the dealer has charged higher price from their customers. Even if in few cases dealers have charged higher, there is nothing on record to show that the amounts charged extra than the retail sale price have flown directly or indirectly to the appellants. Statement of the dealers recorded by the Revenue do not reflect upon the said fact. The appellants have relied upon the Tribunal decision in the case of I.T.C. Ltd. Vs. C.C.E. Bangalore reported in (2002-TAXINDIAONLINE-83-CESTAT-DEL) 1998 (104) ELT 151 (Tribunal ) as also on the Supreme Court decision in the case of State of Madras V/s Radio and Electricals Ltd. - 1966 (18) STC 222(SC).
10. Similarly learned Advocate submits that the allegation that some of the dealers have sold the T.V. as against exchange of old T.V. is irrelevant inasmuch as the same was a transaction between the dealer and the ultimate consumer. They have made it clear in their letter dtd. 12.03.1998 addressed to the dealer that such a exchange arrangement is a scheme between the dealer and the retailer and the appellants was not a party to the same Dealer is required to pay full retail sale price affixed on the package less dealer's margin to the manufacturer. Further the said transaction was done at the option of the dealer and consumer and is not indicative of the fact that retail sale price was not genuine. During the period under consideration thee are instances of sale of Television set at the declared Maximum Retail Price without security deposits which facts shows that Maximum Retail Price was the sole consideration for sale of T.V.
11. As regards the period after 02.06.1998 the learned advocate submits that they have rightly paid duty on ad valorem basis inasmuch the security deposit cannot be called to have influenced the Maximum Retail Price. The commissioner (Appeals) has relied upon Board's circular which has been given in different set of circumstance and is applicable only where the T.V. sets are sold under exchange scheme and duty is paid on the retail sale price affixed on their packages. Inasmuch as the maximum retail price in those cases is not the sole consideration and the value of the old T.V. is also a consideration to the T.V. manufacturer, the Board issued the above circular. In their case the situation is not identical. As such, according to the learned advocate the amendment of the notification effective from 02.06.1998 will not make any difference. Learned advocate has also placed on records two orders passed by the Commissioner of Central Excise (Adjudication), New Delhi and by commissioner of Central Excise (Appeals) in case of manufacture of Videocon brand of T.V.s dropping the demand raised on identical issues. He submits that as per his knowledge, the said orders have not been appealed against by the Revenue.
12. Shri Umashankar, learned S.D.R. appearing for the Revenue has drawn our attention to the allegation made in the Show Cause Notice and confirmed in the order-in-original which has specifically stated that the various dealers of the appellant in the statement have deposed that the Money Back scheme was not optional and they were asked to sell colour T.V.s only when their customers were ready to give the security deposit. Even the invoices raised by various dealers would show that such security deposit was compulsory in nature. As such, argues the learned S.D.R. that the appellant was collecting such deposits in each and every sale of the colour T.V., in which case it has to be concluded that the same wa a consideration towards value of the T.V. but was being collected under a different style. He also drew our attention to the statement of the dealers showing that the in some of the case invoices has been raised at the price higher than the declared maximum retail price. The dealers in their statement recorded during investigation have also admitted that till that period no promissory note was issued by the company to the customers. However, he submits that the promissory note now being shown were issued subsequently. Shri Uma Shankar, Learned S.D.R. has submitted that there is no guarantee that the appellants would return back amount so collected by their customer and they may retain the same after expiry of the period in question in which case the same would become consideration for sale of the T.V.
13. Shri Uma shankar, learned S.D.R. has further submitted that after amendment in the notification w.e.f. 02.06.1998 the retail sale price was defined as the maximum price at which the goods are sold to the ultimate consumer and the price list is the sole consideration for sale. Inasmuch as in present case price is not the sole consideration for sale and the appellants are required to give security deposits, their case would be ousted from the definition of retail sale price and as such they are not entitled to pay duty at ad valorem rate, in which case they would be liable to pay duty at the specific rates as specified in Sub-Sr. No.(ii) of Sr. 229 of the Notification No.5/98.
14. We have considered the submissions made by both the sides and have gone through the impugned order passed by authorities below. Section 4A was inserted in the Act w.e.f. 14.05.1997. For invoking the said section, the conditions precedent are as under :-
(i) the excisable goods must be packaged goods on which the MRP is statutorily required to be specified under Standard Weights & Measures Act.
(ii) such goods must be notified by the Central Government for the purpose of this section;
(iii) such goods must also be chargeable to duty based on their value.
Upon satisfaction of the above conditions, Section 4A(ii) provides that the value of the notified excisable goods for the purpose of the payment of duty will be deemed to be the retail price declared on such goods less abatement, if any, granted by notification. There is no dispute that the Colour T.V. is one of the notified items under the said section and abatement of 30% from the retail sale price ha been granted M/s Videocon International Ltd.was directly marketing the T.V. sets manufactured by it and M/s Videocon Communication Ltd. was selling the said T.V. sets to M/s Videocon International Ltd. who in turn were selling the same to ultimate customers through its Network of dealers. Admittedly all the models of the colour T.V. bore maximum retail price and duty was discharged on the basis of the same after claiming the abatement. With effect from 12.03.1998 the appellant formulated a scheme called 'Money Back Scheme' in respect of five of its models where under their customers wee required to deposit certain amount as security for a specific period over and above the payment of maximum retail price affixed on the T.V. set. The model wise details of the scheme are as under:-
Model No. Cost to dealer Dealer's M.R.P. Rs. Security Period of Security
Margin Rs. Deposit deposit
3607-R 6.390/- 300/- 6,690/- 3,100/- 5 years
5313-R 8,590/- 400/- 8,990/- 4000/- 6 years
5410-R 12,590/- 400/- 12,990/- 4000/- 6 years
5412-R & 5430- 13,990/- 400/- 12,990/- 5,000/- 6 years
R
15. Whereas Revenue is of the view that the security deposit made by the customer at the time of purchase of the T.V. set is to form a part of their maximum retail price, the appellants have strongly contended that the maximum retail price is one which was affixed on the packages and the security deposit has got nothing to do with the same. Even if the security deposit is required to be made in 100% of the sold T.Vs, the same would still be a condition for the sale of the T.V. and not a consideration. We find from records that the deposit made by customers at the time of purchase of the T.V. is secured by the appellant company by way of issuance of the promissory note to them. In terms of the said promissory note the appellants is under a legal obligation to return the amount after the expiry of the specified period alongwith the interest. As such even if it is said that the customer was not exercising any option or will to buy the T.V. with or without the deposit, such deposit cannot still be considered as a consideration of the T.V. sets. Taking a proper example here, if a Tooth paste manufacturer sell the tooth paste at a price 'x' per unit alongwith a tooth brush at the price 'y' unit with a condition that customer will have to buy both the products together, it cannot be said that the price of the Tooth Brush is includable in the price of the Toothpaste. Purchase of the toothbrush may be a condition of sale of the toothpaste and the customers may be under a compulsion to buy both the products together, still it cannot be said that the price of Toothbrush is to be added in the price of the toothpaste.
16. The Hon'ble Supreme Court in the case of CIT V/s Tollygunge Club Ltd. - 1977 (2) SCC 790 while dealing with the question as to whether the surcharge required to be made by a race-goer in addition to the price of admission ticket would become a part of the price for admission has held as under:-
"The admission to the enclosure is the occasion and not the consideration for the surcharge taken from the race-goer. It is true that but for this insistence on payment of the surcharge at the time of admission to the enclosure, the race-goer might not have paid any amount for local charities. But that does not render the payment of the surcharge involuntary, because it is out of his volition that he seeks admittance, he has to pay not only the price of the admission ticket but also the surcharge for the local charities. The surcharge is clearly not a part of the price for admission but it is a payment made for the specific purpose of being applied to local charities."
By observing so it has been held that the surcharge is clearly not a part of the price for admission but it is a payment made for the specific purpose of being applied to local charity.
17. We also take note of the Supreme Court decision in the case of R.S. Joshi reported in 1977 (4) SCC 98 wherein while dealing with the sales tax provision it was observed that the expression"collected" means "collected and kept as his" by the trader. If the dealer merely gathered the same by way of tax and kept in as suspense account because of dispute about taxability or was ready to return if eventually it was not taxable, it was not collected. By observing so, their Lordships held that, "We, therefore semanticise 'collected' not to cover amounts gathered tentatively to be given back if found non-exigible from the dealer "(Para 34). In the instant case also the deposits made by the customers are not meant for retaining by the appellants as a consideration of the sale but the same are required to be returned to the customers after the expiry of the specified period for which the appellants is under a legal obligation having been created on account of issuance of promissory note. During the course of arguments, our attention has been drawn to the Tribunal decision in the case of Maruti Udyog Ltd. V/s Commissioner of Delhi reported in 2003-TAXINDIAONLINE-178-CESTAT-DEL. The Tribunal in the said case was dealing with the situation where Maruti Udyog under a contract with their dealer allowed them special rebate from the sale price of the vehicles but the same was deposited in the security deposit of individual dealers, which was to be returned only on termination of the dealership agreement. The Tribunal observed that the fact that the rebate allowed through credit notes and the amount being deposited in the dealer's reserve fund, on which interest was also being paid, will not make any difference to the essential fact of the grant of non refundable discount. These are arrangements that the parties are at liberty to mutual negotiation and the manufacturer was entirely within his commercial rights to in its on security deposit from dealers. In the said case the rebate, which was being deposited into the reserve account of dealer with the manufacture, was held to be admissible irrespective of the fact that the said deposits were refundable to the dealer only at the termination of the dealership agreement. The ratio of the above decision is squarely applicable to the facts of the present case inasmuch as the deposit are refundable to the customer within a limited period alongwith the interest and such an arrangement between the manufacturer and the dealer under a scheme will not convert the deposit amount into consideration towards the price of the T.V. sets.
18. The Revenue's contention is that the company may not return the said amount on the expiry period in question and may retain the amount which would then be converted into the consideration of sale of T.V. does not impress us inasmuch as it is not denied that the appellants had issued promissory note to their customers. The legal effect of existence of such promissory note cannot be ignored. The appellants are under a legal obligation to repay the amount to the customers. As such, whether the same is actually paid or not the legal effect of the transaction cannot be ignored. Even presuming the appellant's customers do not approach them for return of money at the end of the day or for one reason or other the appellants do not pay the promised amount to the customers, the customers are at liberty to take legal action against the appellants in a court of law and the said fact by itself will not change the colour of the transaction from being one of a legal nature to that of a consideration for sale of the T.V.s. The suggestion of the learned S.D.R. that in case the said deposit has actually been returned, the same may not be added in maximum retail price of the T.V. but the same should be a part of the assessable value of the T.V. where it has not been returned, does not appeal to us inasmuch as it is legal character of the entire transaction which has to be examined and the maximum retail price of the goods cannot go on changing depending upon whether the money has been refunded or not. It is sufficient to observe that the appellants are under a legal obligation to return money and as such irrespective of the facts whether the same are actually returned or not, it is always like a deposit in the hand of the manufacture and would never take the colour of sale price. In fact during the course of argument, a statement was placed on record by learned advocate showing that wherever their customers have approached them for the return of the money in question, the same has been returned alongwith the interest accrued upto that date. Learned Advocate he has argued that if the intention of the company was to charge more from their customers towards the value of the T.V., they would not have made returns of huge amount of money to the customers even before the expiry of the time.
19. Our attention has also been drawn to the United Breweries case 1997 (3) SCC 530 whereas in para 25 and 33 their lordship observed as under : -
"It, however, cannot be said that the money lying with the company for a long time as security deposit from its customers would automatically become sale proceeds in the hands of the company by efflux of time. The customers may lose all claims to the deposit amount by operation of law. The Company may take the unclaimed deposits to this profit and loss account by treating them as trading receipts. That, however, will not convert the deposits which were not received initially as price into sale proceeds of the tins in which the biscuits were supplied or the bottles in which the beer was sold.
"In the present case also the customers clears know the price they will have to pay for the beer. They are required to pay a additional amount by way of deposit for taking away the bottle which is refunded if the bottle is returned. If the bottle is not returned the deposit is retained as liquidated damages for the loss of the bottle. There is a clear intention not to sell the bottle. Hence, we are of of the view that the deposit cannot be considered as price of the bottles."
The observation made by their lordship in above referred case is applicable to the facts of the instance case. The deposit would otherwise remain deposit and even though in some case unclaimed deposit may go to increase the profit of the company still character of the receipt will not change. The deposits as such in our view cannot be considered as the sale price of the goods.
20. We may also take note of the Hon'ble Supreme Court decision in the case of Commissioner of Income ax V/s. Bijli Cotton Mills (P) ltd. 1979 (1) SCC 496, relied upon by the appellant, where compulsory payments realized by the assessee for "Dharmada" from customers purchasing goods were held not to be trade receipts forming part of the price or surcharge on the price of the goods and hence not income in the nature of trade receipts. Though the amount of "Dharmada" is a payment which a customer is required to pay in addition to the price of the goods, the purchase of the goods is only on occasion and not the consideration. It is true that without payment of "Dharmada" amount the customer may not be able to purchase the goods from the assessee, but that would not make the payment involuntary inasmuch as it is out of his own volition that the customer purchases the goods from he assessee. The fact that such amount was not actually spend for charity but was kept in the "Dharmada account" will not turn them into part of consideration for sale of the goods inasmuch as it was customary obligation upon the assessee to send the amounts only on charitable purposes.
Similarly, the appellant in the present case is under an obligation to pay back the deposit plus interest amount at the end of the fixed period and maintains a separate account of such deposits and show their resultant liability in their balance sheets, he complexion of such deposits cannot be changed to consideration of the goods sold.
21. Even for the period subsequent to 02/08/1989, we find that the Colour T.V. sets were to be charged at ad valorem duty of 18% as per Sr. No. 229 (i) of Notification No. 5/98-CE, where retail sale price was declared on the packages at the time of clearance from the factory of production. The retail sale price was defined in the explanation to the said Sr. No. According to explanation, retail sale price means the maximum retail price at which the excisable goods in packaged form may be sold to the ultimate consumer and include all taxes local or otherwise, freight, transport charges, commission payable to the dealers and all charges towards advertisement, delivery, packing, forwarding and the like as the case may be and the price is the sole consideration for such sale. As per this notification when retail sale price is declared on the package at the time of clearance from the factory of production, duty is leviable on ad valorem basis and in other cases, specific rate of duty are prescribed depending upon the screen size. The Revenue case is that inasmuch as the retail sale price affixed on the packages we influenced by the security deposit, the same is not correct retail sale price and as such ad volorem duty paid by the appellants was not correct. Accordingly, Commissioner (Appeals) has remanded the matter for collection of duty at specific rate. For the same reasons which we have discussed in the preceding para, the retail sale price declared by the appellants on the goods in question would remain the sole consideration for sale and the deposits taken from the customers would remain in the nature of deposits which the appellants are under a legal obligation to return to the customers after the specified period. The Commissioner (Appeals) has relied upon a circular issued by the Finance Minister to the effect that the specified rates of duty will apply to T.V. set sold under 'exchange scheme' as the retail sale price printed on their packages does not reflect the price charged as the sole consideration for sale of the T.V. s. As is clear, the above circular is applicable only where the T.V. set are sold under exchange scheme, inasmuch as in that case there is a additional consideration flowing back to the manufacturers in the shape value of the old T.V. In the instant case there is not such profit to the appellants out of the deposit inasmuch as such deposit are being returned to the customers alongwith interest, which interest rate is much higher than the market out bank rate.
22. For the above reasons, we hold that the maximum retail price or retail sale price affixed by the appellants on the colour T.V. sets is the correct value in terms of the provisions of Section 4A and the duty liability has been discharged correctly. As we are of the view, that no demand of duty is sustainable against the appellants, no penalty can be imposed upon them and has been rightly set aside by the Commissioner (Appeals). Accordingly, the above two appeals filed by the manufacturers are allowed with consequential relief to them and the appeals filed by the revenue is rejected.
Appeal No. E/2424/01-MUM ; E/2977/01-MUM and E/2978/01-MUM.
23. The dispute in the present three appeals relate to the Colour Television sets manufactured by M/s. Videocon International Ltd. under the brand name of "Sansui" and sold to M/s. Kitchen Appliances India Ltd. licence trademark user of the said brand name. The manufacture is affixing the Television sets with the maximum retail price, as informed to them by M/s. Kitchen Appliances and the duty was being paid by them accordingly in terms of the provisions of Section 4A, at the rate of 18% ad valorem under notification No. 5/98-CE.
24. There is no dispute that the colour television are being sold by M/s. Kitchen Appliances in the market at the maximum retail price affixed on the same. However, during the period relevant for the purpose of the present appeals M/s. Kitchen Appliances floated a scheme called "Basket Scheme" according to which if more than one items were purchased alongwith the colour televisions, the prices were reduced. There is no dispute that the appellant has paid duty on the maximum retail price affixed on the T.V. Sets, even where they were sold at a consolidated prices of two or more items, which was less than the some total individual selling prices affixed on the same.
25. The demand has been raised against the appellants on the ground that wherever the T.V set has been sold alognwith the other items like Washing machine or Refrigerator or Microwave oven under the "basket scheme", the price charged by the dealer is less than the maximum retail price affixed on the Colour T.V. set. As such, it is the Revenue's contention that the M.R.P. affixed on the T.V. got influenced and was not the correct M.R.P., in which case, the appellant was not entitled to pay duty at the rate of 18% ad valorem. Accordingly, duty has been recalculated in respect of all the clearances of T.V. sets, whether sold individually or under basket scheme, on the basis of the tariff rates specified under Sub Sr. No. (ii) of Sr. No. 229 of Notification No. 5/98-Ce dts. 02/06/1998 and differential duty has been confirmed by the Original Adjudicating Authority. On appeal duty was confirmed by Commissioner (Appeals) but the penalty was set aside. The said order of the Commissioner (Appeals) has been challenged before us by the appellants as also by the Revenue.
26. We have heard Shri V. Shridharn, learned Advocate appearing for the appellants and Shri Uma Shankar, learned S.D.R. for the Revenue.
27. As per the Revenue case made out in the Show Cause Notice maximum retail price declared on the T.V. sets is not the sole consideration since individual maximum retail price of the said product is lost in the basket scheme and gets influenced by the availability of the other goods when sold under basket scheme. It has been admitted that the said scheme was optional and the customers was at liberty to buy only the Colour T.V. set in which the case they were being charged the maximum retail price affixed on the said T.V. The revenue has quoted statements of two dealers of Aurangabad to the effect that where T.V. sets were being sold individually, the dealers have charged more the maximum retail price affixed on the same in some of the cases of the cesses and as such the maximum retail price is not genuine. By holding so the revenue has proposed to adopt specific rate under sub-Sr. No. (ii) of Sr. No. 229 of the Notification No. 5/98-CE dtd. 02/06/1998 for each and every T.V. set cleared during the period of question.
28. The appellants have challenged the finding of the authorities below by submitting that it is an accepted fact that the said scheme was optional and the T.V. sets were also being sold individually a a price declared on the packages. However, wherever they have sold the T.V. sets alongwith the other two items, the price collected from the customers was on the lower side whereas they have paid the duty on higher value declared by them. As such, it cannot be said that the maximum retail price declared by them is not correct or genuine.
29. We find that explanation attached to Sr. No. 229 of Notification No. 5/98-CE reads as under : -
"Explanation. _ 'Retail sale price' means the maximum price at which the excisable goods in packaged from may be sold to the ultimate consumer and includes all taxes local or otherwise freight, transport charges, commission payable to dealers, and all charges towards advertisement, delivery packing, forwarding and the like, as the case may be, and the price is the sole consideration for such sale."
30. As per the definition of the retail sale price given above it is seen that the same refers to Maximum price at which the excisable goods in packaged from may be sold. In the instant case the price at which individual T.V. set have been sold is the same price which has been declared by the manufacturer on the T.V. sets. It is only when the said T.V.s. have been sold under the basket scheme, which was optional, that less sales price has been charged then what was declared price on the T.V. sets. Inasmuch as the duty has been paid on the maximum price declared, we find no justification in the Revenues case to discard the said maximum retail price. The explanation defining the retail sale price in the above notification refers to the maximum retail price on which the excisable goods may be sold to the ultimate consumer and does not refer to the price which is actually charged from the customers and which may be on the lower side. As such, we do not find any justification in the above stand of the revenue.
31. It has also been alleged against the appellant that some of the dealers have sold the T.V. sets at a price higher than the declared maximum retail price. Reliance has been placed upon the statement of two dealers i.e. Sugar Agencies and M/s. Sai Electronics. The appellant have submitted that out of the 1.30 lakhs set of T.V. sold by them during the period in question, the two dealers have only sold around 25 T.V. sets and in respect of three instances each they have charged price marginally higher than the declared maximum retail price. We agree with the appellants contention that the six instances cannot be made the leading evidence so as to conclude that the appellants was charging more price from their customers than the one declared by them especially when there are around 12000 dealers of Kitchen Appliance all over the country and three are not other circumstances showing that the invoices were raised at higher price. The appellant have contended that dealers also sold antennae, voltage stabilizer etc. and may offer optional delivery at the customers end and installation at their premises, in which case the higher charges would stand justified. As such, it cannot be said that the appellants have sold the T.V. set at a higher price than the declared maximum retail price.
32.We find force in the appellant's contention that the six instances cannot be said to be a clinching evidence against the appellant, especially in the fact of denial of cross examination of the said dealers to the appellant/ There is also no averment in the Show cause notice that the extra amount collected by the dealer has flown back to the manufacturer. Even the statement of the dealers have not indicated anything to that effect. At this stage, we may take note of the Tribunal's decision in the case of I.T.C. Ltd. V/s. C.C.E. (2002-TAXINDIAONLINE-83-CESTAT-DEL) 1998 (104) ELT 151 wherein dealing with the identical situation, it was observed that where there were million dealers, M/s. I.T.C. cannot be held responsible for the tendency of the retailer to charge higher than the approved prices so as to secure larger margin. It is only in case where the declaration has been made by the manufacturer which can be proved to be fake by production of sufficient evidence, the sale price has to be discarded. However, the said price which has been adhered to by the maximum No. of dealers, has to be taken as correctly declared maximum retail price and the fact that a very small percentage of dealers has charged marginally higher than maximum retail price, in a negligible No. of cases cannot turn the situation. The definition of the retail sale price suggest that the packages are capable of being sold at that price.
33.To the similar effect, we find another decision of the Tribunal in the case of Maruti Udyog Vs. C.C.E. 2002-TAXINDIAONLINE-78-CESTAT-DEL. In the said case the benefit of the Sr. No. 6 of Notification No. 162/86 granting partial exemption to Saloon cars required for use solely as taxis was granted subject to certificate from the State Transport Authority to the effect that each car has been registered for use solely as taxi. The revenue demanded duty from Maruti Udyog on the ground that vehicles cleared at concessional rate of duty were converted into other vehicles after some time and in some cases ont he very same day. Tribunal while disposing of the matter concluded that once the manufacturer has produced the certificate from the State Transport Authority, which is not forged, the subsequent use of taxi as a car will not result in denial of exemption to the manufacture. The said decision of the Tribunal was confirmed by the Hon'ble Supreme Court when the appeal filed by the Revenue was dismissed as reported in 2001 (127) ELT a 169. By applying ratio of the above decision, we are of the view that merely because in few cases the dealers have deviated from the instructions of the manufacturer, the appellants cannot be denied the benefit otherwise available to them under the law. The contravention has been committed by the dealer inasmuch as instead of selling the T.V. sets at the maximum retail price he has charged a little higher from the customer. In any case, we have taken note of the facts that the said two dealers, from whom statement have been recorded have not sold all the T.V.s. at a higher rate but it is only in respect of three cases per dealer that a higher money has been collected. As rightly argued by the learned Advocate, there nay be some circumstances under which the higher amount has been collected. which have com eon surface, if the revenue would have agreed to allow cross examination of the said dealers. In any case as already observed by us such, negligible number of instances can not take the place of affirmative and legal evidence so as to held that the declared price, which has been followed by all other dealers all over the country, we not bonafide.
34. Commissioner (Appeals) has relied upon the Board's circular dtd. 23/11/1998 to that it is the responsibility o the manufacturer discharging duty liability of T.V. sets to ensure that final price charged from the ultimate consumer is not more than the declared maximum retail price and if found to be charged in excess, discharge duty at higher specific rate, Commissioner (Appeals) has observed that the said circular is binding on the Department. The appellant's contention is that a quasi judicial authority is not bound by the circular which is adverse to the assessee and the correctness of the same can be challenged by showing it to be contrary to law. It is only those circular which are in favour of the assessee which have been held to be of binding nature upon the Revenue's own officers. Reference has also been made to the various decisions holding that such circular are binding on the departmental officers but not binding on the quasi judicial authority and assessee. This has been so held by the Hon'ble Calcutta High Court in the case of Birla Jute and Industries Vs. Assistant Commissioner - 1992 (57) ELT 674 (Cal). There can be not in dispute about the above legal position. Circulars which are contrary to the correct legal interpretation are not binding on the judicial authorities. As we have already observed that sale of the T.V.s. alongwith other electrical items being manufactured by the appellants under the basket scheme at a price lower than the declared retail sale price, would not influence such declared price and the appellants have correctly discharged their duty liability on the declared retail sale price.
35. In view of the foregoing discussion, we allow the appeal filed by M/s. Videocon International Ltd. and reject the appeals filed by the Commissioner against M/s. Videocon International Ltd. and M/s. Kitchen Appliances India Ltd. We make it clear at this point that since the appeals are being allowed on the main issue itself we are not considering the other alternative appeals raised by as regards the quantification of the demand and the applicability of the notification in question w.e.f. 01/08/1995.
36. In a nutshell appeals filed by the manufacturers are allowed with consequential relief to them and the appeals filed by the Revenue are rejected.