HINDUSTAN APPLIANCES Vs. CCE, NEW DELHI

JUDGEMENT

(1.) THIS is an application filed by M/s Hinsutan Appliances for waiver of pre -deposit of Central Excise duty amounting to Rs. 41,46,450/ - and equal amount of penalty imposed by the Commissioner of Central Excise, New Delhi under the impugned order.

(2.) SH . M. Chandra Sekheran, ld. Sr. advocate, submitted that the applicants manufacture domestic appliances of different models; that in pursuance of the provisions of the Standards of Weights and Measures Act, they wee affixing labels on their products indicating MRP, that Section 4A was inserted in the Central Excise Act by Finance Act, 1997 and the duty became payable on the basis of MRP in respect of the goods manufactured by them with effect from 2.6.98; that on the said date huge stock of empty c]ons was lying with them as well as with their supplier, that instead of destroying the same they affixed new labels with the revised MRP over the place pre -printed with pre June 1998 MRPs and these revised MRPs were indicated on the relevant invoices. The ld. sr. counsel further mentioned that the Commissioner under the impugned order has demanded duty and imposed penalty holding that the Maximum Retail Price (MRP) on the cartons of finished goods was higher than the MRP indicated by the party on the sale invoices; that Commissioner has also referred to Explanation 2(a) of Section 4A which provides that higher MRP printed on the packages would be taken for arriving at the value for the payment of duty. The ld. Sr. counsel submitted that as per Rule 6 of the Standards of Weights and Measures (Packaged Commodities) Rules, 1977, every package shall bear thereon or on a label securely affixed thereto a definite, plain and conspicuous declaration as to the price of the gods; that the rules, therefore, permits a manufacturer to affix labels on the packages indicating MRP. Finally, he submitted that this Explanation 2(a) has come into effect with effect from 12.5.2000 whereas the demand confirmed against them pertains to the earlier period i.e. from 2.6.98 to 27.11.98; that the demand is also time barred as show -cause notice was issued on 29.3.2000 which is beyond the specified period of six months; that there is no evidence about the allegation of removal of domestic appliances with MRP higher than those mentioned in the invoices issued at the time of removal of the goods and there was no provisions in the Central Excise Act or rule regarding intimating about the affixing of labels of MRPs before removal of the goods.

(3.) OPPOSING the prayer Sh. P.K. Jain, ld. SDR, submitted that it is clearly mentioned in the show -cause notice (para 6) that when the godown premises of M/s Maharaja Appliances Ltd., Chandigarh was search, 68 pcs. of appliances were found to have higher MRPs than indicated on the relevant invoices and MRP printed on the new labels that this goes to show that the applicants were clearing the domestic appliances at different MRPs. He also mentioned that the applicants had not produced any documentary evidence to show that cartons which were got printed before the introduction of Section 4A to their product were available with them that larger period of limitation as provided in Section 11A of the Central Excise Act is invocable as they has suppressed the MRP on the sale invoices and had cleared the goods at a lower assessable value.