2004 (97) ECC 694 (Tri)

CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL

New Delhi -- Bench-NB-A

Shri S.S. Kang, Member (J) and Shri C.N.B. Nair, Member (T)

G.S. Enterprises

Versus

CCE, Jaipur

Appeal No. E/2890/2003-NB-A

[Arising out of Order-in-Appeal No. 384(SN) CE/JPR-I/2002 dated 2.9.2003 passed by the Commissioner Customs & Central Excise (Appeals) Jaipur]

Final Order No. 835/2004-NB(A), dt. 6.4.2004, Certified on 23.8.2004

Central Excise Act, 1944

Section 4A or 4 -- Whether the razors supplied to the manufacturer of cherry Blossom specifically marked as free with cherry blossom are to be assessed under Section 4A of Central Excise Act or under Section 4 of the Central Excise Act? The razors cleared to the manufacturer of shoe polish were not having any MRP mentioned on the packets. The packets are only marked as free with cherry blossom shoe polish. The Board issued a Circular No. 625/16/2002-CX dated 28.2.2002 and clarified that if there is no statutory requirement under the provisions of Weights & Measures Act for declare the retail sale price on the packages Section 4A will not be applicable. The razor in question bear declaration as free alongwith shoe polish and there is no declaration regarding MRP on the packet. The Tribunal found merit in the contention of the appellant that the razors which are printed as free supply are to be assessed under Section 4 of the Act.

Appeal is allowed

PRESENT :

Shri R.D. Gupta, C.A. for the appellant.

Shri S.C. Pushkarna, JDR for the respondent.

Cases Cited :

1. Jayanti Food Processing Pvt. Ltd. v. CCE, Jaipur,
2002 (49) RLT 133........................................................................................ [Para 6]

2. Nestle India Ltd. v. Commissioner of Central Excise, Goa, 2004 (93) ECC 115 ... [Para 6]

Per : S.S. Kang

Heard both sides.

2. Appellant filed this appeal against the Order-in-Appeal passed by the Commissioner (Appeals).

3. The appellants are engaged in the manufacture of twin blade razors on job work basis. The appellants are duty bound to fix the MRP on the razors which are for retail sale. During the period in dispute appellants entered into contract with M/s. Reckitt Benckiser India Limited, who are engaged in the manufacture of Cherry Blossom shoe polish, for supply of the razor which were to be supplied free of cost alongwith the pack of cherry blossom shoe polish. The issue involved in this appeal is whether the razors are to be assessed under Section 4A of Central Excise Act or under Section 4 of the Central Excise Act.

4. The contention of the appellant is that the goods supplied to the manufacture of cherry blossom are not for retail sale and no MRP are mentioned on that. The razor is specifically marked as free with cherry blossom. Therefore, they are liable to pay Central Excise Duty as per provisions of Section 4 of Central Excise Act.

5. On the other hand, the contention of the revenue is that the appellants are under obligation to mention the MRP on the razor in question. Ultimately, these razors were supplied with the cherry blossom shoe polish for retail sale. Therefore, they are liable to be assessed as per the provision of the Section 4A of the Central Excise Act.

6. The revenue relied upon the Tribunal's decision in the case of Nestle India Ltd. v. Commissioner of Central Excise, Goa, 2004 (93) ECC 115 : 2004 (163) ELT 249 and also relying on the decision in the case of Jayanti Food Processing Pvt. Ltd. v. CCE, Jaipur, 2002 (49) RLT 133.

7. We find that admitted facts of the present case are that the razors cleared to the manufacturer of shoe polish were not having any MRP mentioned on the packets. The packets are only marked as free with cherry blossom shoe polish. The Board issued a Circular No. 625/16/2002-CX dated 28.2.2002 where it was clarified in respect of the goods, which were supplied free with another consumable item as marketing strategy and MRP is not printed as notified items. The Board clarified that Section 4A of the Central Excise Act is applicable in respect of those goods where the manufacturer is legally obliged to print the MRP on the packages of goods, under the provisions of the Standards of Weights and Measures Act, or the rules made thereunder. The Board also clarified that if there is no statutory requirement under the provisions of Weight & Measures Act for declare the retail sale price on the packages Section 4A will not be applicable.

8. The Revenue relied in the case of Jayanti Food Processing Pvt. Ltd. v CCE, Jaipur and Nestle India Ltd. v. CCE, Goa (supra). In the case of Nestle India Ltd. it is not disputed by the assessee that the chocolates which were to be given free with the bottle of the soft drink also carries the declaration regarding MRP. In the present case the razor which are to be distributed free alongwith shoe polish does not bear any MRP. In the case of Jayanti Food Processing Pvt. Ltd., it is held that 4 litres packing of ice cream were ultimately sold to the retailers, therefore, are to be assessed under Section 4A of Central Excise Act. We find that the facts of the present case is different from the case relied upon by the Revenue. In the present case the razor in question bear declaration as free alongwith shoe polish and there is no declaration regarding MRP on the packet. In view of the above Board Circular we find merit in the contention of the appellant that the razors which are printed as free supply are to be assessed under Section 4 of the Act. The impugned order is set aside and appeal is allowed.

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