Case Law Details
Hindustan Unilever Limited Vs Commissioner of GST & Central Excise (CESTAT Chennai)
The case of Hindustan Unilever Limited versus Commissioner of GST & Central Excise (CESTAT Chennai) revolves around the determination of the assessable value of shampoo sachets under the Central Excise Act. Hindustan Unilever Limited, the appellant, engaged in the manufacture of shampoos, faced a dispute regarding the valuation methodology for shampoos packaged in sachets.
The appellant cleared shampoo sachets without indicating any measure or weight on the packaging, prompting the department to question their eligibility for exclusion under Rule 34 of the Standards of Weights and Measures (Packaged Commodity) Rules, 1977. The department proposed a demand for differential duty under Section 4A of the Central Excise Act, 1985. The appellant argued that as per Rule 34 of SWMPCR, 1977, and subsequently Rule 26(a) of Legal Metrology (Packaged Commodity) Rules 2011, no requirement exists for affixing MRP on sachets containing less than 10ml.
The issue at hand was whether the assessable value of shampoo sachets containing 10ml or less falls under Section 4 or 4A of the Central Excise Act. The appellant contended that since the sachets contained less than 10ml, duty was paid based on transaction value under Section 4. The Tribunal’s decision in Sarvotham Care Ltd. vs. Commissioner of Central Excise supported the appellant’s stance, emphasizing that valuation under Section 4 was appropriate even for specified items under Section 4A.
The Tribunal reiterated that statutory requirements for declaring MRP on packages must exist for valuation under Section 4A. Considering the marketing pattern and manufacturer’s intent, the Tribunal concluded that the assessment under Section 4 was justified. Relying on precedent and considering the absence of statutory MRP declaration requirements, the Tribunal set aside the demand under Section 4A, favoring assessment under Section 4.
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