BPL TELECOM (P) LTD. Vs. CCE

JUDGEMENT

(1.) A duty demand of Cover Rs. 33 lakhs has been confirmed under impugned orders. The demand is in respect of telephone instruments sold by the appellants during the period June 2001 to November 2001 to the Department of Telecom/Bharat Sanchar Nigam Limited. At the time of removal of these instruments, the appellants discharged duty liability as arising from their valuation in terms of Section 4A of the Central Excise Act, 1944, i.e. maximum retail price affixed on the goods minus notified percentage of abatement. The impugned order holds that goods were required to be assessed to duty based on their actual sale price in terms of Section 4 of the Central Excise Act. The reason for holding so is that contract sales to DOT/BSNL are not covered by Section 4A of the Central Excise Act. The Order -in -Original dated 7.3.2003 states the disputes as under:

(2.) The impugned orders have also noted that the telephone instruments were required to be assessed according to their contract sale price under Section 4A according to Circular No. 625/16/2002 -CX dated 28.2.2002 of the Central Board of Excise and Customs.

(3.) The submission of the appellant is that Section 4A carves out a separate basis for valuation for goods specified under that Section. According to the appellant this is clear from the wording of the Section - - "notwithstanding anything contained in Section 4, such value of specified goods shall be deemed to be the retail sale price declared on such goods less such amount of abatement". The appellant has pointed out that telephone instruments are "specified goods" under Section 4A and the abatement specified is 40%. It is therefore, the appellant's contention that telephone instruments satisfying the requirements under Packaged Commodities Rules i.e. affixing with retail sale price, should be valued in terms of Section 4A and not at the wholesale price as provided in Section 4. During the hearing of the case, learned Counsel for the appellant pointed out that once the goods fell for valuation in terms of Section 4A, actual sale price is wholly irrelevant for the purpose of central excise valuation. Learned Counsel also pointed out that the only exception to this are clearances under Rule 34 of the Packaged Commodities Rules i.e. clearances of specifically packed goods for exclusive use in any industry as a raw material or for purpose of servicing an industry, mine or colliery, such clearances being exempt from the provisions of Packaged Commodities Rules. Learned Counsel for the appellants emphasised that the exception under Rule 34 has no application to the present case since there is no dispute at all that telecom instruments in question had been packed in terms of Packaged Commodities Rules. He pointed out that this is clear from the fact that lower authorities have specifically noted in their orders that "MRP has been declared on the individual cartons".