ORDER
C.N.B. Nair, Member (T)
1. Appellant M/s Hindustan Coca Cola Beverages Pvt. Ltd. manufactures different varieties of aerated water. They are liable to central excise duty on ad valorem basis. These goods have also been specified under Section 4A of the Central Excise Act. As a result, they become liable to be valued for the purpose of central excise duty based on MRP affixed on them. The percentage of deduction as notified would be allowed on MRP, the resultant amount taken as the assessable value for levy of duty.
2. On 28-2-2000, the appellant filed a declaration under Rule 173C(2A) intimating the Central Excise authorities about change/revision of MRP. The subsequent verification showed that appellant had cleared after 28-2-2000 and also goods under pre-revised MRPs and discharged duty on that basis. Under the impugned order, duty demand has been raised in respect of clearances of goods on which increase in MRP had been intimated, on the ground that duty has not been paid according to the declared MRP. Similar is the case in regard to declaration dated 10-7-2000 also.
3. The submission of the appellant is that even though revision of MRP had been carried out in MRP as intimated under the letters, stocks On hand with the pre-revised MRPs marked on them had to be disposed of out of the old MRPs and in respect of those goods, duty was rightly discharged based on the MRPs affixed. Learned Counsel for the appellants submitted that the action of the appellant is entirely in accordance with the law, inasmuch as, Sub-section (2) of Section 4A stipulates that “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”. It is the learned Counsel’s submission that declaration under 173C(2A) made no difference to this legal position and that valuation should be done based on the MRP declared on the goods. He has also submitted that this position remains settled by the decision of the Hon’ble High Court of Karnataka in the case of H & R Johnson (India) Ltd. v. C.C.E. and Cus., New Delhi – 2002 (144) E.L.T. 506. Learned Counsel has drawn our attention to para 15 of the judgment.
4. We have perused the records and have considered the submissions made by both sides. It is not in dispute that the goods in question were required to be valued in terms of Section 4A(2). That sub-section reads as under :
“(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 oh 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.”
The scope of this sub-section has been pronounced upon by the Karnataka High Court. Para 15 of the aforesaid judgment reads as under :
“15. It is no doubt true that the format of declaration prescribed under Rule 173C(2A) requires the manufacturer to declare as the ‘retail sale price’ only the highest of several sale prices that are applicable to different regions/States. But the contention of the department that Explanation 2 to Section 4A refers to the retail sale price declared in the form of declaration prescribed under Rule 173C(2A) cannot be accepted. The form of declaration prescribed under Rule 173C(2A) does not determine the liability. The form cannot be so worded as to put a different meaning on Section 4A(2) or Explanation 2 to Section 4A. Further, if the form of declaration prescribed requires declaration of only one price, the question of Explanation 2 to Section 4A referring to the retail sale price declared in the form of declaration would not arise, as Explanation 2 refers to declaration of more than one retail sale price. When the format of declaration contemplates only one retail sale price being declared and Explanation 2 contemplates more than one retail sale price being declared on the excisable goods, it necessarily follows that Explanation 2 refers to the retail sale price declared on the packages and not in the declaration under Rule 173C(2A). Once it is held that Explanation 2 refers to the retail price on the package and not on the format prescribed under Rule 173C(2A), the contention of the Department will have to be rejected as the appellant declares only one retail sale price on the packages sold in one region or State and therefore, that alone will be the retail sale price for purpose of Section 4A in regard to such goods sold in such region. The question of applying retail sale price that is declared in some other area or region will not arise.”
5. There is no dispute in the present case that valuation undertaken was in conformity with the MRP declared on the goods. No short-levy takes place in such a case. The duty demands raised in the impugned orders have no legal basis. They are required to be quashed. We do so and allow the appeals.