- (1.) This judgment will dispose of in all 15 appeals. They can be classified in two groups. Two appeals are filed by the Assessees challenging the order of Customs, Excise & Gold (Control) Appellate Tribunal (hereinafter referred to as "the Tribunal"), they being CA 2819/2002 filed on behalf of Jayanti Food Processing (P) Ltd., for sale of Ice-creams and CA 1738/2004 filed on behalf of Nestle India Limited pertaining to KITKAT Chocolates. The remaining appeals are filed by the Commissioners of Central Excise from various places and they are CA 2150-51/2004 and CA6425/2005 against ITEL Industries, CA 1144/2004 and CA 4754/2006 against BPL Telecom Ltd., CA 1385/2005 against Himachal Exicom Communication Ltd. These appeals by themselves formulate into one group relating to the sale of telephone instruments by the assesses. CA 2877/2005, CA6168/2005 and CA5840/2006 against Electrolux Kelvinator and Electrolux India relate to the sale of Refrigerators. Further CA6559- 6560/2005 against Explicit Trading and Marketing Pvt.Ltd., pertain to the sale of bottled mineral water. Lastly CA498/2006 against Ramani Power Cables Pvt., Ltd. relate to the sale of Electric Filament Lamps.
(2.) All these appeals pertain to the interpretation of Section 4 and 4A of the Central Excise Act, 1944 (hereinafter referred to as "the Act") and the provisions of Standards of Weights & Measures Act, 1976 (hereinafter referred to as "the SWM Act") as also the Standards of Weights & Measures (Packaged Commodities) Rules, 1977 (hereinafter referred to as "the SWM (PC) Rules"). In the appeals filed by the Assessees, Jayanti Foods and Nestle India the Tribunal has accepted the contention of the Department that these Assessees should be assessed under Section 4A while the contention of the Assessees is that they should be assessed and taxed under Section 4 of the Act. In the appeals filed by the Department pertaining to sale of Telephone Instruments, the contention of the Department is that they should also be taxed and assessed under Section 4 and not under Section 4A of the Act as ordered by the Tribunal. Similar is the case in respect of appeals pertaining to the sale of Refrigerators where the Tribunal has ordered the assessment under Section 4A of the Act. In the case of sale of Bottled Mineral Water while the Tribunal has ordered the assessment under Section 4, the Department suggests that the assessment should be under Section 4A of the Act. Lastly CA 498/2006 pertain to the sale of Electric Filament Lamps where the assessment is ordered under Section 4A of the Act. In short unless an authoritative interpretation is handed out, it will not be possible to settle the issues between the assessees and the Department. In respect of some of the items, as the assessment under Section 4A is less, the same is being insisted upon by the Assessee while in some cases the assessment being more beneficial under Section 4, the Assessees insisted on the assessment under Section 4 of the Act. Eventually the stand of the Department is to the contrary. All these appeals, therefore, would depend upon the interpretation of the scope of Section 4A which is inextricably connected with the provisions of PC Rules under the SWM Act. We would, therefore, first explain the interpretation and scope of Section 4A more particularly sub-sections (1) and (2) thereof. Section 4A was added by Section 82 of the Finance Act, 1997 (Act 26 of 1997) which amendment was with effect from 14.5.1997. Section 4A, as it originally stood, and relevant for our purposes, is as under: "Section 4A. Valuation of excisable goods with reference to retail sale price " (1) The Central Government may, by notification in the Official Gazette, specify any goods, in relation to which it is required, under the provisions of the Standards of Weights and Measures Act, 1976 (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, to which the provisions of sub-section (2) shall apply. (2) Where the goods specified under sub-section (1) are excisable goods and are chargeable to duty of excise with reference to value, then, notwithstanding anything contained in section 4, such value shall be deemed to be the retail sale price declared on such goods less such amount of abatement, if any, from such retail sale price as the Central Government may allow by notification in the Official Gazette. (3) The Central Government may, for the purpose of allowing any abatement under sub-section (2) take into account the amount of duty of excise, sales tax and other taxes, if any, payable on such goods. (4) 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, or declares a retail sale price which does not constitute the sole consideration for such sale, or tampers with, obliterates or alters any such declaration made on the packages after removal, such goods shall be liable to confiscation. Explanation 1. For the purposes of this section, "retail sale price" means the maximum price at which the excisable goods in packaged form 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. Explanation 2 (a) Where on the package of any excisable goods more than one retail sale price is declared, the maximum of such retail sale price shall be deemed to be the retail sale price for the purpose of this section. (b) Where different retail sale prices are declared on different packages for the sale of any excisable goods in packaged form in different areas, each such retail sale prices shall be the retail price for the purposes of valuation of the excisable goods intended to be sold in the area to which the retail sale price relates." This Section was introduced with the sole idea to end the uncertainty caused in determining the value of the goods under Section 4 and then assessing the duty under that Section. Section 4 was the basic formula for valuation of excisable goods and for the purposes of charging of the duty of excise. It provided the mechanism of determining the valuation of the goods under various circumstances, e.g., in the matter of wholesale trade or in the matter of sales being at the different prices for different places of removal or in case where the assessee sold the goods only to related persons, etc. Section 4A of the Act, as would be clear from the language of sub-section (1), linked the valuation of the goods to the provisions of SWM Act or the Rules made thereunder by firstly providing that it would be for the Central Government to specify any goods in respect of which the declaration of price on the package was required under the provisions of SWM Act, Rules made thereunder or any law for the time being in force. In short sub-section (1) was linked with the packages of the goods in respect of which the retail sale price was required to be printed under SWM Act and the Rules made thereunder or any other law. Sub-section (2) then provides that such specified goods where they are excisable goods would be valued not on any other basis but on the basis of the retail sale price declared on such packages. The Section also provides that the assessee would be entitled to the deduction from such valuation the amount of abatement provided by the Central Government by a notification in the Official Gazette. In short after introduction of Section 4A, the nature of sale lost its relevancy in the sense that the valuation did not depend upon the factor whether it was a wholesale or sale in bulk or a retail sale. The whole section covered the goods which were packaged and sold as such with the rider that such package had to have a retail price thereupon under the provisions of SWM Act, Rules made thereunder or under any other law. Thus, viewed from the plain language of the Section, where the goods are excisable goods and are packaged and further such packages are required to mention the price thereof under the SWM Act, Rules made thereunder or under any other law and further such goods are specified by the Central Government by notification in the Official Gazette, then the valuation of such goods would be on the basis of the retail sale price of such goods and only to such goods the provisions of sub-section (2) shall apply whereby it is provided that the value of such goods would be deemed to be the such retail price declared on the packages. Of course, the assessee shall be entitled to have a reduction of abatement as declared by the Central Government by the notification in the Official Gazette. Even at the cost of repetition the following would be factors to include the goods in Section 4A(1) & (2) of the Act: i) The goods should be excisable goods; ii) They should be such as are sold in the package; iii) There should be requirement in the SWM Act or the Rules made thereunder or any other law to declare the price of such goods relating to their retail price on the package. iv) The Central Government must have specified such goods by notification in the Official Gazette; v) The valuation of such goods would be as per the declared retail sale price on the packages less the amount of abatement. If all these factors are applicable to any goods, then alone the valuation of the goods and the assessment of duty would be under Section 4A of the Act.
(3.) It is not in dispute that all the goods with which we are concerned in these appeals are excisable goods and they are specified by the Central Government by issuing a notification in the Official Gazette.;