M/s Contemporary Targett Pvt Ltd Vs C.C.E. & S.T.-Vadodara-I (CESTAT Ahmedabad)
Facts is not under dispute that the tooth brushes manufactured and supplied by the appellant were cleared either in bulk form or combo pack or in naked condition that means without any retail packing. Goods were supplied to tooth paste manufacturer who in turn used these tooth brushes for making a combo pack with tooth paste for free supply, therefore, the tooth brushes cleared by the appellant was neither sold as such in retail either by the appellant or the buyers i.e. M/s Colgate Palmolive (India) Limited, Oral care etc.
Mumbai Bench of the Tribunal in the case of Nestle India Limited (Supra) also held that promotional pack of maggi noodles supplied free with Packet of Tata Tea and such packs of maggi noodles were not bearing MRP with declaration “free with Tata Tea”. Therefore, provisions of Standards of Weights and Measures Act, 1976 and Rules made there under would not apply on such supplies. As such valuation of such goods cannot be done under Section 4A of Central Excise Act, 1944 and the appeal of the assessee was allowed. It can be seen that from the above Hon‟ble Supreme Court judgment in the case of Jayanti food processing (P) Ltd. (Supra) and Nestle India Limited (Supra) the issue is no longer res integra as the identical facts are involved in the present case, therefore, the tooth brushes supplied by the appellant which is not for retail sale but for free supply by the tooth paste manufacturer will not be valued under Section 4A (Valuation of excisable goods with reference to retail sale price) in the hands of the appellant. Accordingly, the value adopted by the appellant under Section 4 is correct and legal which does not need any interference.
FULL TEXT OF THE CESTAT JUDGEMENT
The brief facts of the case are that the appellant are engaged in manufacture of Tooth Brushes falling under chapter 96 of the First Schedule to Central Excise Tariff Act, 1985. It was noticed that they had cleared the tooth brushes in combo pack/bulk/naked condition to manufacturer of Toothpaste for free distribution by inserting the brush in the tooth brushes pack. The tooth brushes classified under Chapter sub-heading No. 9603 2100 of Central Excise Tariff Act, 1985 were assessed by the appellant on transaction value based on contract price under Section 4 of the Central Excise Act, 1944. The tooth brushes mainly cleared to M/s Colgate Palmolive (India) Limited or M/s Advance Oral Care and Professional and Oral Care Product Pvt. Ltd. The case of the department is that the tooth brushes so cleared was required to be assessed under Section 4A of the Central Excise Act, 1944. i.e. on MRP basis instead of transaction value, on the basis that the toothpaste manufactured by the appellant for their customer were also packed in the blister packing in 1/2/3/4 prices in pack printed with MRP at it, as per Standards of Weights and Measures Act and were assessed as per section 4A of the Central Excise Act, 1944 and duty was discharged on MRP basis as notified by the Government under MRP price assessment. Accordingly, the differential duty demand was confirmed by the adjudicating authority, therefore, the present appeal.
2. Sh. Jitu Motwani Ld. Counsel appearing on behalf of the appellant at the outset submits that the identical issue has been decided by the Bombay Tribunal in case of International India Pvt. Ltd Vs. CCE-Goa 2018 (9) GSTL 71 (T). He further submits that the tooth brushes manufactured for companies such as Colgate Palmolive etc. were not intended for sale in retail sale, it is not packed in retail pack, no MRP was declared of the product, the product were admittedly sold to toothpaste manufacturer for complimentary supplies along with tooth paste, therefore, neither the appellant had intention to clear the toothbrushes for retail sale nor factually the toothbrush were sold as such in retail, therefore, the said toothbrushes supplied are not covered under provision of section 4A of Central Excise Act, 1944 for the purpose of valuation. He invited our attention to the various provision of Section 4A, standards of weights and measure (package commodity Rules 1997), (Rule126, the Legal Metrology) (package commodities Rules 2011) Central Excise Manual of CBECs instruction chapter 3, Notification No. 11/06-CE (NT) dated 29.05.2006. The Board Circular No. 625/16/2002-CE dated 28.02.2002. He also placed reliance on the following judgments:
