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3. Shri V.K. Jain, Shri P.M. Dave, Shri Vishal Agarwal, Shri P.D. Rachchh, Shri P.V. Sheth, Ms.Dimple Gohil  Advocates appeared on behalf of the appellants and Shri P.R.V. Raman, Special Counsel appointed by the Revenue and Shri K. Sivakumar, Addl.Commissioner (A.R.) appeared on behalf of the Revenue.
4. It is the common submission of the ld.Counsel for the appellants that the dispute in the present appeals pertains to two periods i.e. period prior to 01.03.2008 and period post 01.03.2008. It is the submission that the appellant had manufactured and cleared the ceramic glazed tiles and vitrified tiles which were covered under the provisions of Section 4A of Central Excise Act, 1944 (herein referred to as the Act). It is the submission that on perusal of the Order-in-Original, it is very clear that the directors, partners of the appellant had given ex-culpatory statements. It is the submission that when the tiles were cleared from the factory premises, the said tiles were sold on the basis of factory gate sale price and transport arrangements were to be undertaken by the buyers/purchasers/dealers. It is also the submission that the tiles when they were removed from the factory premises, MRP was printed on the said tile boxes. It is the submission that all the appellants herein discharged the Central Excise duty based upon such declared MRP on the boxes of tiles after availing the eligible abatement. It is the submission that the statements which were recorded by the investigating officers, specifically stated that the goods when they were removed from the factory premises, there was a MRP which was declared on such boxes. After taking us through various statements of dealers and other persons, ld.Counsel submit that the dealers have specifically stated that MRP was declared on the tile boxes which were cleared from the factory premises but the dealer had sold the said tile boxes at higher price to the purchasers of such tiles. It is the submission that it would indicate that there was changing of MRP after the tiles were removed from the factory premises. After making these submissions, ld.Counsel would take us through the provisions of Section 4A of the Act and also the definition of manufacturer as it would apply to the product in question as enumerated in Section 2(f) of the Act. After taking us through said provision, it was submitted that the change of MRP would tantamount to manufacture and such changing of MRP on the boxes took place subsequent to the clearance of the goods hence if any duty is liable to be demanded, it would not be on the manufacturer but on the persons who have changed the MRP. It is further submitted that they had specifically stated before the adjudicating authority that the provisions of Section 4A underwent a change for collection of the duty in the case where MRP which has been declared is considered as incorrect by the lower authorities. After taking us through the changed provision of sub-section 4 of Section 4A of the Act, ld.Counsel would state that the said sub-section provides for enactment of rule to determine revised MRP/RSP. He would submit that such rules were brought into statute by Notification No.13/2008-CE(NT) and was made applicable from 01.03.2008. It is the submission that when there was no provision of re-determining the MRP/RSP, even if it is considered that there was under-valuation, determination of the MRP/RSP should have been done only as per the provisions of the sub-section (4) of Section 4A of the Act which can be brought into statute from 01.03.2008. It is the submission that Tribunal in the case of Millennium Appliances India Ltd Vs CCE Hyderabad  2009 (248) ELT 713 (Tri-Bang), Ravi Foods Pvt.Ltd. Vs CCE Hyderabad  2011 (266) ELT 399 (Tri-Bang), M/s ABB Ltd 2011-TIOL-972-CESTAT has specifically considered these provisions and held that prior to 01.03.2008, re-determination of declared MRP/RSP could not have been done by the Revenue authorities, in absence of any rules under the provisions of sub-section (4) of Section 4A of the Act. Ld.Counsel would take us through the detailed order passed by the Bench in these cases. Reliance is also been placed by the ld.Counsel on the judgments in the case of Mohammad Hussain Gulam Hohammad & Anr Vs State of Bombay & Others  AIR 1962 SC 97, Consumer Online Foundation & Ors Vs UoI & Ors - (2011) 5 SCC 360, Dhrangadhar Chemical Works Vs State of Gujarat & Ors (1973) 2 SCC 345, P. Kasilingam & Ors Vs PSG College of Technology & Ors (1995) Supp 2 SCC 348, PNB Financial Ltd (2008) 13 SCC 94, Sunil Siddharthbhai (1985) 4 SCC 519, Bhayana Builders Pvt.Ltd. 2013 (32) STR 49 for the proposition that in the absence of rule having been framed during the relevant period, provisions of Section 4A (4) was not operational. It was further submitted that in the case of Sinnamani (2012) 5 SCC 759; Babu Varghese (1999) 3 SCC 422, Mira Sahani (2008) 9 SCC 177 for the proposition as to when the statute provides a thing to be done in a particular manner, then the thing has to be done in that manner only and no other manner. It is also the submission that in absence of any relevant facts being brought on record, adverse inference ought to be drawn against the Revenue as has been held in the case of Panasonic AVC Network India Co. Ltd - 2013 (288) ELT 413 (Tri-Del); Tex-AGE 2008 (221) ELT 395, Vishwajyoti Impex - 2009 (238) ELT 257 (Tri-Mum), Pratapsingh & Anr - (2005) 13 SCC 624; and it was submitted that the Revenue authorities did not bring on record that the MRP declared on the boxes of tiles cleared from the factory premises was altered by the appellants/manufacturer; that the dealers who had stated in the statements that there was sale of the tiles at a price higher than what was cleared from the factory premises. In continuation of such submission, it was stated that in the current scenario, it cannot be expected of any buyer/consumer purchasing a box of tiles wherein MRP is declared is Rs.100 but the dealer/seller sells the goods for Rs.150; it would indicate that the boxes when sold to the customers, there was a change in MRP. It is also further submitted that in continuation of this proposition that the despite making Pan India investigation, the DGCEI authorities were unable to seize even one carton of tiles which was cleared from the factory premises of the appellant wherein the declared MRP was changed and nor is there any evidence brought on record as to who changed the MRP. It is the submission that impugned order be set aside and the appeals be allowed. It is also further submitted that as regards the demand of the duty liability post 01.03.2008, the demand is also not correct in as much as the adjudicating authority has not followed the provisions of valuation rules as envisaged by Notification No.13/2008-CE(NT). It is the submission that the said rules which came into statute from 01.03.2008 requires the authorities to follow the said rules before coming to a conclusion of demand of differential on the allegations of under-valuation of the goods which are covered under the provisions of sub-section (4) of Section 4A of the Act.
5. Ld.Standing Special Counsel appearing for Revenue would submit the overall factual aspects of the case. It is his submission that the investigations were undertaken with shroffs and dealers and it indicated that the dealers of the tiles were paying cash in excess of the amount of the bills which were raised on them and was routed through the shroffs. It is his submission that the details of evidences which were collected during the entire period of investigation indicated that the dealers had paid various manufacturers of tiles, (who are appellants) cash over and above the invoiced amount; invoices were issued by the manufacturers for a lesser amount; it is also submitted that investigation was conducted with 3 transporters and the statements recorded from the proprietor of these firms revealed that the truck carried the full load of tiles and transportation charges were collected in cash to avoid deduction of income tax at source as well as to evade payment of Service Tax. It is also his submission that if the margins to the dealers and local transportation cost are added, actual MRP would be so high as to render declared MRP total totally infeasible. It is his further submitted that the investigations conducted with 11 firms of shroffs located in Rajkot/Morbi who handled the task of reaching the cash payment received from dealer to the manufacturer, revealed a modus operandi which was well executed; transfer of cash amount by their dealers was handled in different modes and methods i.e. within Gujarat cash was transferred to angadiya and from outside Gujarat cash amounts were either collected personally by authorized representative of the manufacturer or their sales personnel during their visit to dealer. He would submit most common method used for collection of cash amount was through bank accounts opened in different private banks in the name of large number of fictitious trading firms; shroffs deposited the amount in such bank account number and transmit the bank account number, pin number to the manufacturer and the manufacturer through their net work withdrew cash deposited in such account. It is his submission that the details of investigations also reveal that the amount involved was very huge. It is his submission that the statements recorded of the representatives/ partners/owners of the tile manufacturers does indicate that there was one MRP declared on all sizes of tiles, across the board, while there was a difference in each and every tile manufactured and cleared by the manufacturer. It is further submission that the after-effect of the massive investigation, has resulted that the manufacturers have increased the retail sale prices of various brands substantially, which would indicate that the prices were earlier suppressed in order to evade Central Excise duty. It is his submission that the manufacturers have destroyed all the data, information regarding actual MRP of different grades/colours/design of ceramic tiles cleared by them for the period prior to 01.03.2008 and this can be evidenced from the fact that the ceramic/vitrified tiles manufactured by organized sector manufacturers like M/s Somani Pilington Ltd and M/s H & R Johnson Ltd has very high MRP/RSP on like goods. He would submit that essentially the issue is regarding the under-valuation of the ceramic/vitrified tiles for the period prior to 01.03.2008 and post 01.03.2008. He would assail the defences taken by the ld.Counsel for the appellant, on the ground that that the fact remains the manufacturers ought to have declared the RSPs correctly by including all the elements enumerated in Explanation-I to Section 4A of the Central Excise Act, 1944; have not included the cash payments which were received over and above the abated price which is to be held as additional consideration and hence the RSP which was declared was not sole consideration for the sale of the goods. It is his submission that when confronted by the statements of shroffs and the dealers, none of the representatives of the manufacturers would escape admitting duty evasion by mis-declaring the RSP and it is worthwhile to note that none of the statements were ever retracted. It is also his submission that the proprietors/partners of the manufacturers of ceramic/vitrified tiles have not denied receiving cash from the dealer. It is his submission that the defences taken by the appellants counsel that the declared price for delivery of goods was at the factory gate and the appellants had availed the abatement and hence the price on which the Excise duty has to be paid on the same, is incorrect submission, as the manufacturers mayl not have the factored un-quantified element in the declared RSP, the RSP which was declared on the package were only dealers prices and not maximum retail prices at which the goods may be sold to ultimate consumer, and the statements of the individuals indicate that they have not taken into consideration the expenses such as freight, profit of dealers, sub-dealers and payment of VAT while fixing the MRP, would in itself indicate the RSP which were declared on the boxes were incorrect. He would also take us through the figures which are illustrated in the impugned order to show that if the dealers costs and profit are included along with cash payment, the declared MRP is less. It is also his submission that the intention of the manufacturers were very clear as they had declared one single MRP for each grade irrespective of size, quality and design, though the cost of production would have been different on account of these factors. It is also his submission that the arguments raised on legal issues basically concern the interpretation of the provisions of Section 4A of Central Excise Act, 1944 which relates to the determination of value of excisable goods based on the concept of RSP i.e. maximum price at which the specified goods may be sold to the dealer. After giving a overall view of the reasons for introducing such a provision i.e. Section 4A, he would submit that in the year 1999, new sub-section (4) was added to Section 4A to provide confiscation of goods in respect of clearances which were effected without declaring the RSP, tampering or altering the RSP or mis-declaring RSP. He would further submit that in the year 2003, sub-section (4) was substituted by an elaborate provision to cover cases of default including the cases where the manufacturer declared incorrect RSP and decide the liability of confiscation of such goods, it also provided for ascertainment of RSP in the specified cases of default was to be done in a prescribed manner. He would submit that subsequently, rules were framed by Notification No.13/2008-CE(NT), dt.01.03.2008 describing the manner of ascertainment of RSP in the aforesaid cases of defaults. It is his submission that the arguments of the ld.Counsel that from 01.03.2008, only the value of mis-declared MRP can be re-calculated is incorrect as provisions of Section 3 of Central Excise Act, 1944 is a charging section for levy of Central Excise duty and the provisions of Section 4A are machinery provisions. It is his submission that the definition of RSP given in Explanation-I also enumerate elements that would form a part of RSP and these provisions are applicable to all specified goods in all situations. It is his submission that in deliberately declaring artificially low RSP and leaving out the element of actual freight borne by the dealer, dealers profit, VAT payable by dealer, etc from the RSP, the appellants have clearly violated the criteria laid down in Explanation I to Section 4A of Central Excise Act, 1944, hence recovering an amount over and above the invoice price resulting from sale of goods needs to be added and duty liability confirmed needs to be upheld. It is his submission that re-determination of MRP for a period post 01.03.2008 is also correct, as there is a charge of evasion which has been substantially proved by various statements of the dealers and the transporters and the manufacturers themselves. He would rely upon the decision of the Tribunal in the case of Sudhir Sharma - 2011 (265) ELT 243 for the proposition that if an admission is clear and an unequivocal is the best evidence against the party. He would submit that the appellants reliance on the decision in the case of M/s Millenium Appliances - 2009 (248) ELT 713, M/s Ravi Foods Pvt.Ltd.  2011 (256) ELT 399 and M/s ABB Ltd 2011 (272) ELT 706 are mis-placed in as much as in all these cases, Tribunal has always stated that re-determination of RSP was permissible, in the absence of rules prescribing the manner of ascertainment of RSP. It is his submission that the ratio laid down by the judgments of M/s Millenium Appliances, M/s Aditya Cement ought not to be applied to the present case at all as the facts are different and in the case of M/s Ravi Foods Pvt.Ltd., the facts were totally different and the application of the judgment of M/s Millenium Appliances was improper. It is his submission that in the case of ABB Ltd., the issue was not related to demand of Central Excise duty but CVD and the reliance was again placed on Millennium Appliances India Ltd. It is his submission that the Revenue would like to rely upon the decision in the case of M/s Planet Sports Pvt.Ltd.  2005 (180) ELT 206, M/s Media Industries Ltd.  2006 (199) ELT 345 and M/s Onida Saka Ltd.  2011 (267) ELT 101, wherein the re-determination of RSP was upheld and re-determination of RSP on best judgment basis was also upheld by laying down a ratio just because there is no provision in Section 4A for enhancing the declared MRP, if the same was not found to be correct, it does not mean that during the period, an assessee coming within the purview of Section 4A was free to declare any false MRP and evade the duty as it is well settled law that nobody can be allowed to benefit from his wrong doing. It is his submission that the appellants in these cases should also be not allowed to take undue advantage of wrong doing merely on the ground that the manner of ascertainment was not prescribed during the period from 14.05.2003 to 01.03.2008. He would submit that Revenue places reliance on the judgment of Apex Court in the case of M/s Mahim Patram Pvt.Ltd.  2007 (7) STR 110 wherein their Lordships have held that measure or value to which rate would be applied but how the turnover would be determined is another; Computation provision may bear a relationship with the nature of charge and charging section and computation provision together constitute an integrated course. He would submit that this ratio would directly apply in the cases in hand as the charging Section specifically talks about the levy of Central Excise duty based on the RSP of the goods to the ultimate consumer. It is his submission that this view was followed by the differing Member (Technical) in the case of Schneider India Ltd. 2013-TIOL-1502-CESTAT-MUM. It is his submission holding that non-availability of provisions for re-determination of RSP during the period 14.05.2003 to 01.03.2008 and re-determination being set aside on this ground would certainly lead to absurd result. He would distinguish the various decisions as relied upon by ld.Counsel for the appellant.

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, dated 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. v. CCE, Hyderabad [2009 (248) E.L.T. 713 (Tri. - Bang.)], this Bench on this point has held as under :-

15. We also find that in the cases in hand, on factual matrix also, there is a strong case in favour of the assessee i.e. manufacturer of tiles. The statements recorded of the individuals of manufacturer of the tiles, specifically state that they were declaring a RSP of Rs.100/- on each box which were cleared by them from the factory premises, it is also stated that the said clearances are effected on ex-factory basis and transportation of such boxes are in the hands of the buyers. If it is the case of the Revenue that RSP was later on changed and sold to the ultimate consumer at higher price, it was for the Department to first ascertain who has changed the said MRP. In our view, the person who has altered the RSP on the goods is the person who can be held as a manufacturer on alteration of RSP; as the definition of manufacturer Section 2(f) of the Act (herein before reproduced) specifically talks about the process of declaration or alteration of RSP on the product which are covered under the provisions of Section 4A of the Act would be considered as a manufactured product. As stated hereinabove, it is the case of the Revenue that there was an alteration of the MRP, there is nothing on record which indicates that the appellant manufacturers herein are the persons who have altered the MRP in godown/places of the dealers. The dealers whose statements were recorded by the Revenue authorities state that they have sold the goods at a higher price than the price at which goods were cleared from factory premises of the appellants. We are unable to understand the investigating authorities mind, as during the course of investigation there is a a specific admission of the dealers that they have sold the goods at higher MRP than the declared MRP; no question was put any of the dealers as to who altered the RSP declared on boxes of glazed/vitrified tiles. In our considered view, this clinching evidence has not been recorded by the investigating authorities, for the reasons best known to them. If there would have been any evidence in any form as to who altered the RSP, then the duty liability, in our considered view, gets crystallized in the hands of such persons as goods become manufactured goods; is the law which can be deduced from the provisions of Central Excise Act, 1944. In the absence of any evidence suggesting as to who altered the MRP on the boxes of tiles, we are of the view that the Revenue authorities cannot turn around and take a stand that the manufacturers are liable to duty, which would effectively mean that they are the persons who have altered the RSP. Yet another angle to the entire case is absence of evidence as to there being alteration of RSP; in as much as when the investigations were conducted by the authorities, we find that the investigating authorities have not seized a single carton of the offending goods in the Pan India operation at different dealers premises, wherein different RSP was declared. It would be beyond imagination that the dealers could not have had any stocks of glazed/vitrified tiles received from the appellants, in their hands when the investigation took place. In the absence of such a crucial evidence, we are unable to hold that the appellant herein can be saddled with a liability of Central Excise duty based upon re-determined RSP, for the period prior to 01.03.2008.