CCE Vs. LIBERTY SHOES LTD.

JUDGEMENT

(1.) THE respondent is a known manufacturer of different varieties of foot wear that including many varieties of shoes. The subject of dispute in the present appeals of the revenue is the valuation of shoes sold to institutional buyers.

(2.) SECTION 4 of the Central Excise Act, 1944 is the main provision relating to the valuation of excisable goods which are subject to advalorem rates of duty. The criterion for valuation under that section is the transaction value between the manufacturer and the buyer. An exception to this scheme is Section 4A of the same Act which provides that goods specified by the Central Govt. and which are required under the Weights and Measures Act and rules to print MRP on retail package shall be valued for duty purposes based on the printed MRP, minus abatement notified for a particular product by the Govt.

(3.) FOOT wear is an item specified under Section 4A, Therefore, the respondent cleared the shoes sold by them to all buyers, including institutional buyers, after paying excise duty based on the printed MRP based value. Thus, the valuation was made under Section 4A. However subsequently, SCN was issued contending that the valuation was required to be done under Section 4 of the Act in -as -much as there was no retail sale involved when bulk sales are made to institutional buyers. In adjudication, this view was upheld and duty demand was confirmed. But when the matter went before Commissioner (Appeals), he noted that the shoes in question also had MRP affixed on them and therefore, they were also required to be assessed under Section 4A. He specifically noted that the clearances were not under Rule 34 of the Weights and Measures Rules which exempted supplies of materials in bulk from the operation of Weights and Measures Act. The Commissioner (Sic) also noted the relevant case law on the subject, while passing the order. The present appeal of the revenue contends that the order of the Commissioner is incorrect.