COMMISSIONER OF CENTRAL EXCISE, SURAT Vs. VVF LTD.

JUDGEMENT

(1.) Being aggrieved with the order passed by the Commissioner (Appeals), the Revenue has preferred the present appeal. We have heard Shri M.M. Mathkar, learned JDR for the Revenue and Shri Rohan Shah, learned advocate for the respondent.

(2.) AS per the facts on record, the respondent are engaged in the manufacture of toilet soaps falling under Chapter 34 of Central Excise Act, 1944. The said product is a notified item under the provisions of Section 4(A) of the Act, which provides for assessment of duty on the basis of maximum retail price (MRP). The assessee was clearing the soaps in the market on the basis of declared MRP of Rs.15 and was paying duty accordingly. However, the dispute in the present appeal relates to the clearance of Johnson baby soap of Johnson, on which no MRP was affixed and which was sold to M/s Nestle (I) Ltd. under a contract price, for free gift along with sale of their product. The assessment to duty was claimed under the normal price in terms of Section 4 of the act. The said claim was not accepted by the Revenue and proceedings were initiated against them, which culminated into an order passed by the Dy. Commissioner confirming demand and imposing penalty. The said order was appealed against and reversed by the Commissioner (Appeals).

(3.) FOR better appreciation of the reasonings adopoted by the Commissioner (Appeals), we would like to reproduce the relevant paragraphs below :