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(i) CCE Vs. Ballarpur Industries Ltd. [2007 (215) ELT 489 (S.C.)]

(ii) CCE Vs. Champdany Industries Ltd. [2009 (241) ELT 481 (S.C.)]

(iii) Bajrang Ispat & Plywood Ltd. Vs. CCE [Final Order No. 1418 to 1426/2009 dated 30.11.2009 of CESTAT, Bangalore]

(ii) It is the submission that there is no dispute that duty liability had been worked out on the assessable value arrived at under Section 4A of the Central Excise Act, 1944. It is the submission that the Show Cause Notice also considered the excess amount collected by the appellants i.e. Rs. 3.75 crores as representing 65% of the MRP value and demanded duty after apportioning this amount between the two units of the assessees.

(iii) It is the submission that if the contention of the department has to be accepted then revised MRP of the total products cleared would be double. It is the submission that once the department has accepted the MRP declared on the package then it is for the department to prove that any amount in excess of the MRP declared was collected from the customer. It is the submission that in the absence of any such verification, the declared MRP cannot be revised.

(iv) It is the submission that the provisions of Section 4A of the Central Excise Act, 1944 provides for the determination of duty payable on excisable goods on the basis of retail selling price where it is mandatory for the assessee to declare the retail selling price on the package. It is the submission that with effect from 1.3.2008, the Central Government has prescribed the MRP Valuation Rules which are required to be followed for re-determination of retail sale price / maximum retail price in cases mentioned in clause (a) & (b) to sub-section (4) to Section 4A.

11. Be that as it may, we find from para 26 of the show-cause notice that the show-cause notice has proceeded ahead for the quantification of the duty based upon the monthly returns filed by the appellant companies and extrapolating amount of Rs.3.75 crores which has been admitted as undisclosed / suppressed sales turnover for the month of December, 2001 and January, 2002 before the Income Tax authorities. The said para 26 is reproduced below:-

It can be seen from the above reproduced paragraph that the lower authorities in the show-cause notice have tried to quantify the demand by re-working out the Retail Sale Price (RSP) / Maximum Retail Price (MRP) by taking the amount of Rs.3.75 crores as addable to the MRP.

It can be seen from the above reproduced Section 4A of the Central Excise Act, 1944, that the said section provides for determination of duty payable on excisable goods on the basis of RSP as per the provisions of Standards of Weights and Measures Act, 1976 and Rules made there under. It is undisputed that in the month of December, 2001 and January, 2002, the appellants filed monthly returns indicating the assessable value after availing the abatement in accordance to the notification issued under the said section i.e. 65% of the MRP. There is also no dispute that the MRP which was declared on the goods cleared during the relevant period was either obliterated or scored out. It can be seen from the above reproduced Section 4A that sub-section (4) was introduced by the legislature w.e.f. 1/3/2008. It is also to be noted that the recalculation or re-quantification of an amount received in excess of the MRP declared and collected from the customers has to be done in a prescribed manner. The provisions of MRP Valuation rules under sub-section (4) of Section 4A was introduced w.e.f. 1/3/2008 wherein the Central Government prescribed a procedure to be followed for re-determination of RSP and MRP in case where assessee has collected an amount in excess of the RSP / MRP declared. This re-determination has to be done, failing which the RSP / MRP cannot be revised by the authorities. We find that the CBEC vide circular No.334/1/2008-TRU dt. 29/2/2008 made it clear that the MRP Valuation rules are effective from 1/3/2008. This would indicate that prior to 1/3/2008, there was no procedure to revise the MRP and demand the duty even though there being a provision under sub-section (4) of Section 4A of the Central Excise Act, 1944. In the absence of any legal machinery during the relevant period, re-determination of RSP /MRP by the Department is without any authority of law. We find that in the case of Millennium Appliances India Ltd. Vs. CCE, Hyderabad [2009(248) ELT 713 (Tri. Bang.)], this Bench on this point has held as under:-