Chartered Accountant
Bookmark and Share
click here to subscribe our newsletter
 
 
Corporate News *  GST registration cancellation without reasons amounts to ‘Economic Death’ of business: Supreme Court. *  No GST refund if appeal before GSTAT is filed late: Gujarat High Court. *  Mere upload of GST notice on portal not valid service, appeal limitation won’t start: Punjab & Haryana High Court. *  Taxpayer can’t be penalised for missing notices hidden under ‘Additional Notices/Orders’: Calcutta High Court allows fresh adjudication. *  State tax officer can’t issue GST SCN beyond CBIC-assigned jurisdiction: Bombay High Court stays recovery proceedings. *  Earlier 7.5% Pre-Deposit must count towards mandatory 10% for Appeal: Uttarakhand high court quashes CESTAT Order. *  Third Parties can’t challenge GST Advance Rulings merely due to financial impact: Karnataka HC *  GST SCN generated using AI tool quashed: Punjab & Haryana High Court *  Bank Attachment Quashed as Madras HC Quashes GST Order Issued Against Deceased Person *  ITC Blocking Order for Failure to Record ‘Reason to Believe’ U/R 86A Quashed: Allahabad High Court *  Govt Extends GSTAT Appeal Filing Deadline From 30 June to July 31, 2026 *  GST Demand on RWA Stayed: Allahabad High Court Questions Taxability of Electricity Distribution to Flat Owners *  CBIC Clarifies Jurisdiction After GST Registration Transfer: Earlier Proceedings Remain Valid, New Officer to Continue Action *  GST authorities’ certification not mandatory for reimbursement, but tax payment must be proven: Karnataka HC *  Contractor can’t seek gst reimbursement through writ when contract has arbitration clause: Karnataka HC *  Unsigned Order Is No Order in Law: AP HC Quashes GST Assessment Order for Want of Officer’s Signature *  Customs Can’t Levy Rs. 1.36 Crore Cost Recovery Charges Without Proof of Full-Day Officer Deployment: CESTAT  *  12% IGST Payable On Imported Dialysis Machine Parts: CESTAT *  Bombay High Court Admits Challenge to GST Limitation Extension Notifications; Grants Protection Against Coercive Recovery *  Criminal Case Can’t Run Parallel to GST Proceedings on Same Facts: Allahabad High Court *  Allahabad High Court Stays GST Detention Order; Directs Release of Vehicle and Goods on Deposit of Rs. 1.44 Lakh *  Service Tax Can’t Be Levied on Loss-Making Contracts: Gujarat High Court *  GSTN Mandates Ship-to GSTIN in e-Invoice and e-Way Bill APIs; Introduces Voluntary e-Way Bill Closure Facility from August 1, 2026 *  GST Appeal Can’t Be Rejected as Time-Barred When Taxpayer Was Pursuing Rectification Remedy: Telangana High Court *  Absence of E-Way Bill and Transport Documents Justifies Customs Seizure U/s 110: Gauhati HC *  Madras High Court Upholds GST Late Fee and Penalty for Non-Filing of Annual Return, Dismisses Challenge  *  GST Records, Purchase Documents Sufficient to Discharge Burden Under Customs Act: CESTAT Orders Release of 3.65 Kg Gold  *  No Sugar Cess Payable on Sugar Exported Out of India: CESTAT *  Road Construction Services Exempt and SCN Time-Barred: CESTAT Quashes Service Tax Demand Based Solely on Form 26AS  *  ITC Freeze Upheld After GST Dept Find Suppliers Were Allegedly Fake Bill-Trading Entities: Madras HC 
Subject News *  Input service benefits can’t be denied: CESTAT allows export refund despite MMTC acting as Canalising agency. *  No service tax demand without proof of service of SCN: CESTAT. *  Service tax demand quashed as dept. fails to prove service of SCN: CESTAT *  GST : Mere allegation of inadequate consideration of reply not enough to invoke writ jurisdiction: Delhi High Court *  Onerous conditions imposed for provisional release of seized imported goods shouldn’t amount to virtual denial of relief: CESTAT. *  GST SCN without alleging fraud cannot invoke sec. 74: Karnataka High Court quashes adjudication order. *  Extended Limitation Can’t Be Invoked Merely on Form 26AS Data: CESTAT *  Revenue-Sharing with Restaurants Not Taxable as Business Support Service: CESTAT *  R. 6(3) Option Can’t Be Forced on Taxpayer; CESTAT Quashes Rs. 12.36 Crore CENVAT Credit Demand *  Excise Duty | Power Consumption Alone Can’t Prove Clandestine Manufacture: Karnataka High Court *  Madras High Court Examines DGGI’s Authority to Issue GST Penalty Orders Under Section 122, Adds DGGI as Party *  Proceedings under omitted r. 96(10) can’t survive without saving clause: andhra pradesh high court quashes gst refund recovery *  Excise duty power consumption alone can’t prove clandestine manufacture: karnataka high court *  Madras high court rules GST show cause notices must disclose grounds for invoking extended limitation *  Court Can’t Direct Extension GST Return Deadlines or Waive Interest and Penalties: Karnataka High Court *  GST Notifications Can’t Go Beyond GST Council Recommendations: Madras High Court Quashes SCN on Branded Pulses *  Appeal Can’t Be Dismissed for Delay When Dept’s Own Order Mis-states Limitation Period: CESTAT *  No Evidence of KYC or Due Diligence Breach By Customs Broker: CESTAT Quashes Licence Revocation in Export Overvaluation Case *  Glucometers Are Chemical Analysis Instruments Classifiable Under Tariff Heading 9027: CESTAT *  Validity of Post-GST Service Tax Proceedings Upheld: Gujarat High Court Dismisses Challenge to S. 73 SCN *  Rectified GST Refund Applications Can’t Be Rejected as Time-Barred If Original Refund Claim Was Filed Within Limitation: Gujarat HC *  Service Tax Refund Can’t Be Denied as Time-Barred When Levy Itself Is Unconstitutional: Gujarat High Court *  Same Officer Can’t Act As Auditor & Adjudicator: Karnataka High Court *  Karnataka High Court Condones 324-Day Delay, Revives Customs Appeal in Jewellery Pilferage Case  *  Madras High Court Quashes GST Assessment Order Passed Ex Parte Despite Prior ITC Reversal; Lifts Bank Attachment *  Tobacco Process Doesn’t Amount to Manufacturing: Madras High Court Quashes Rs. 1.32 Crore Compensation Cess Demand  *  Recovery Notice Unsustainable After Voluntary Reversal of Unutilised Credit: CESTAT  *  GST | ‘System Generated’ SCN Without Officer Details Invalid: Allahabad HC  *  Electronic Records Without Statutory Certification Requirements Can’t Justify Undervaluation Allegations: CESTAT *  Madras High Court Stays GST Order, Finds Prima Facie Merit in Plea Against S. 74 Proceedings Based on S. 73 Intimation  

Comments

Print   |    |  Comment

PJ/Case Laws/2012-13/1508

Penalty set aside when department unable to prove with cogent evidence that assessee misdeclared MRP.

Case:- PANASONIC AVC NETWORK INDIA CO.LTD.  Versus COMMR. OF C. EX., MEERUT-II

Citation:- 2013(288) E.L.T. 413 (Tri.- Del.)

Brief Facts:-This appeal is directed against the order of the Commissioner (Appeal) dated 29-10-2004, whereby the partly accepted appeal against the order-in- original of Assistant Commissioner of Central Excise, Noida dated 28-2-2002 and set aside confiscation order relating to TV receiver S.No. RK-7312923328 valued at Rs. 14,490/- and confirmed confiscation order in relation to other  7 receiver sets. He also reduced redemption fine from Rs. 40000/- to Rs. 35000/- and reduced penalty imposed on the appellant MTAIL (now known as M/s. Panasonic AVC Network India Co. Ltd.) from Rs. 1 lakh to Rs.50,000/-.

M/s. Panasonic AVC Network India Co. Ltd. [earlier known as M/s. Matsushita TV & Audio (I) Ltd.], the appellant herein , being aggrieved of penalty of Rs. 50,000/- imposed by Commissioner (Appeals) has preferred this appeal.

The appellant were engaged in the manufacture of Panasonic Brand CTVs classifiable under sub-heading 8528 of Schedule of the Central Excise Tariff Act, 1985. The CTVs manufactured by the appellant were marketed by M/s. National Panasonic India Ltd.(for short NPIL). M/s. swagat, Fraser Road, Patna was a dealer of CTVs manufactured by the appellant.

On 10-12-1998, Anti-Evasion Wing of Central Excise department conducted search at the premises of the appellants, M/s. Urvashi Sales Pvt. Ltd., Patna and M/s. swagat, Fraser Road, Patna as MRP alleged printed on the carton of CTVs was more than the MRP declared to the department at time of removal of the goods from the factory. Details are given as under:-

 
Make Model No. Sl.No. Qty MRP Printed MRP declared to the department
Panasonic TC14L3 RK 7523316690 01 11490 10900
Panasonic TC20L3 RK 7312923328 02 15490 14350
Panasonic TC20S70 RK 8154506190
RK 8144506186
RK 8154506195
03 17490 17250
Panasonic TC21E2 RK 823517080 01 17990 17450
Panasonic TC21S90 RK 7613904481 01 22990 21750
Panasonic TC25S100 RK 8144700507 01 30990 29990
 


















Since there was mis-matched between MRP declared by the manufacturer and sale price of respective TVs, the statement of Shri Avinash Kumar Verma, Partner of M/s. Swagat, Fraser Road, Patna was recorded under Section 14 of Central Excise Act. Shri Avinash Kumar Verma in his statement inter alia stated that his firm was selling CTVs as per rate recorded by the company/distributors.

It  is the case of the department that M/s. Urbashi Sales Pvt. Ltd. had issued price circular to its dealers  effective from 24-10-1997 and 1-8-1998 respectively wherein price of various models were declared as under:-

Customer Price as per circular of M/s. Urbashi Sales Pvt. Ltd. 

Model W.E.F. 24-10-1997 W.E.F. 1-8-1998
14L3 12700 11490
20L3 16900 15490
21E2 18700 17990
20S70 17600 17490
21L10C 20700 19990
21V50 20500 19990
21V50CV 21900  
21S90 22100 22990
21S100 23600 23990
25L10C 27700 27990
21E1 17600 15990
29S100 41600 42990
25S100 30990  
           

The above referred price circular issued by M/s. Urvashi Sales Pvt. Ltd. and M/s. NPIL revealed that sale price declared in those circulars was higher than the MRP declared by the appellant at time of removal of the goods from their factory.

The department being of the view that MTAIL misdeclared the MRP with a view to evade excise duty issued show cause notice calling upon MTAIL to show cause as to eight CTVs valued Rs. 1,46,100/- should not be confiscated under Rule 9(2) read with Rule 173Q of the relevant rules and why penalty may not be imposed upon them.

The Assistant Commissioner of central excise, Noida vide order-in-original dated 28-2-2002 adjudicated the show cause notice and directed the confiscation of eight CTVs valued at 1,46,100/- and imposed redemption fine of Rs. 40000/- for redeeming those CTVs. He further imposed penalty of Rs.1 lakh on M/s. MTAIL and penalty of Rs. 50,000/- each on NPIL and M/s. Swagat, Fraser Road ,Patna under Rule 209A.The Appellant M/s. MTAIL preferred appeal against the order in original. The Commissioner (Appeals) vide order-in-original set aside the confiscation order in respect of one TV receiver and confirmed in respect of other seven receiver set and reduced redemption fine to Rs. 35000/- He also reduced penalty imposed on M/s. MTAIL to Rs. 50,000/-

Appellant Contentions:-The learned Counsel for the appellant has contended that impugned order is based upon incorrect appreciation of law and facts. In support of his contention, learned Counsel for appellant took us through Section 4A of Central Excise Act, 1944 and submitted that Section 4A empowers the Central Government to specify any goods by notification in the Official Gazette on which manufacturer would be required to declare maximum retail sale price and in such cases, the valuation of those specified goods for the purpose of excise duty would be deemed to be MRP declared on the said goods less such amount of abatement, if any, allowed any notification in Official Gazette. Learned Counsel submitted that in the instant case, the allegation of the departments are the appellant’s MRP printed on the carton of CTVs was higher than the MRP declared by appellant at the time of clearing the goods on payment of excise duty from the factory of the appellant. The onus of proving these allegations was squarely on the department which he has failed to discharge by producing confiscated CTVs or their cartons having MRP printed. In the absence of such evidence there is no justification for the conclusion that the MRP printed on the cartons of CTVs was higher than the MRP declared at the time of clearance of the goods. Learned Counsel for the appellant submitted that the appellant has placed on records photographs of relevant portion of cartons of confiscated CTVs that contained printed MRP and at least three of those photographs, MRP printed is legible and it is the same as was declared to the department at the time of clearing the goods from the factory. Thus, it is contended that there is no justification for imposing penalty on the appellant for misdeclaring MRP of CTVs and the impugned order is liable to be set aside.

Respondent Contentions:-  The Respondent has argued in support of the impugned order. He referred to the price circulars issued by M\s. Urvashi Sales Pvt. Ltd. and NPIL wherein price of CTVs is shown higher than the declared MRP and submitted that in view of those price circulars, the adjudicating authority as well as the Commissioner (Appeals) have rightly concluded that the appellant has misdeclared MRP at time of clearance of the goods and the penalty has been rightly imposed on the appellant MTAIL, the predecessor of the appellant-company

Reasoning of Judgment:- We have considered the rival submission and perused the records, Section 4A of Central Excise Act, 1944 which was introduced by way of amendment with effect from 14-5-1997 read thus:

“Section 4A. Valuation of Excisable goods with reference to retail sale price.-(1) The Central Government may, by notification in Official Gazette, specify any goods, in relation to which it is required, under the provision of the Standard of Weights and Measures Act, 1976(60 of 1976) or the rules made thereunder or under any other law for the time being in force, to declare on the package thereof the retail sale price of such goods , to which the provisions of sub-section(2) shall apply. (2) Where the goods specified under sub-section (1) are excisable goods and are chargeable to duty of excise with reference to the value, then, notwithstanding anything contained in section 4, such value shall be deemed to be the retail sale price declared on such goods less such amount of abatement, if any, from such retail price as Central Government may allow by notification in the official gazette. (3) The Central Government may, for the purpose of allowing any abatement under Sub-section (2), take into account the amount of duty of excise, sales tax and other taxes, if any, payable on such goods. (4) If any manufacturer removes from the place of manufacture any excisable goods specified under sub-section (1) without declaring the retail sale price of such goods on the packages, or declares a retail sale price which does not constitute the sole consideration of such sale, or tampers with, obliterates or alters any such declaration made on the packages after removal, such goods shall be liable to confiscation.”

On the reading of the above, it is evident that Section 4A confers power on the Central Government to require by way of notification in the official gazette, the manufacturer of notified goods to declare maximum retail sale price on the goods or on its package and in that case the valuation of the specified goods for purpose of payment of excise duty would be maximum retail price declared on the goods or on the carton. It is not disputed that MRP was actually printed on the carton of seized CTVs. The case of the department show-cause notice is that the CTVs were seized on 10-12-1998 as MRP printed on the CTVs was found to be more than the declared to department. This allegation could be provided by producing carton of seized CTVs. The department however has failed to produce aforesaid best evidence during adjudication proceedings. Cartons of seized CTVs have not been produced before Tribunal. Therefore, this is a case of withholding of best evidence by department. As such, we are inclined to draw an adverse presumption against the Revenue. On the contrary, the appellant had placed before the adjudicating authority the photograph of portion of cartons where MRP was printed. Most of these photographs are illegible. However, on three of the photographs, MRP printed is legible. Other ground on which the appellant authority has concluded that misdeclaration of MRP is the price circulars seized during the investigation wherein retail price of CTVs is more than price declared at time of clearance of the goods from the factory. We find it difficult to agree with the aforesaid conclusion arrived at merely on the basis of price list, particularly, when there is no evidence on record to show that during the relevant period any CTV was sold to the ultimate customers at a price higher than the price declared by the assessee to the department or that any change or modification on printed MRP was done by dealer/ distributor in terms of those price list. In view of the discussion above, we are of the view that the impugned order imposing penalty on the appellant on the ground of misdeclaration of MRP is not sustainable.

Decision:-The appeal is accepted and impugned order imposing penalty of Rs. 50,000/- on the appellant is set aside.

Comment:- The essence of this case is that withholding of best evidence by department lead to drawing adverse opinion against the department and benefit of doubt was extended to the assessee by setting aside the penalty imposed on account of misdeclaration of goods.

 
 
Department News


Query

 
PRADEEP JAIN, F.C.A.

Head Office : -

Address :
"SUGYAN", H - 29, SHASTRI NAGAR, JODHPUR (RAJ.) - 342003

Phone No. :
0291 - 2439496, 0291 - 3258496

Mobile No. :
09314722236

Fax No. :0291 - 2439496


Branch Office : -

Address:
1008, 10th FLOOR, SUKH SAGAR COMPLEX,
NEAR FORTUNE LANDMARK HOTEL, USMANPURA,
ASHRAM ROAD, AHMEDABAD-380013

Phone No. :
079-32999496, 27560043

Mobile No. :
093777659496, 09377649496

E-mail :pradeep@capradeepjain.com