Geoffrey Manners and Co. Ltd. Vs. Commissioner of Central Excise, - Court Judgment

Excerpt:

.....its retail price as provided in section 4a of the act. in the order impugned in the appeal, this value has been applied to the quantities of the toothpaste manufactured by the applicant which was distributed free of cost.2. the commissioner accepts that the value of these goods should be determined under rule 6b(1) of the valuation rules but says that this value is the value of the goods to be sold in retail. the counsel for the applicant contends that "value" is determined in the valuation rules as meaning the value referred in section 4. therefore it is by application of rule 6b(2) that the value is to be determined. we find this argument prima facie to be acceptable. the value under section 4a is the deemed value and an exception to the value as determinable under section 4. it is the latter value which is referred to in the valuation rules by definition, and therefore it is this value to be considered and applied to rule 6.3. on this prima facie view, we waive deposit of the duty demanded of rs. 11.17 lakhs and penalty of rs. 10,000/-. the order of detention dated 15.3.00 passed by the dy. commissioner to recover the duty in this case is hereby accordingly vacated.

Judgment:

1. Applicant manufactures as a job worker tootpaste which it supplies to Smith kline Beecham Asia Pvt. Ltd. The value for assessment of such toothpaste is to be derived from its retail price as provided in Section 4A of the Act. In the order impugned in the appeal, this value has been applied to the quantities of the toothpaste manufactured by the applicant which was distributed free of cost.

2. The Commissioner accepts that the value of these goods should be determined under rule 6B(1) of the Valuation Rules but says that this value is the value of the goods to be sold in retail. The counsel for the applicant contends that "value" is determined in the Valuation Rules as meaning the value referred in Section 4. Therefore it is by application of rule 6B(2) that the value is to be determined. We find this argument prima facie to be acceptable. The value under Section 4A is the deemed value and an exception to the value as determinable under Section 4. It is the latter value which is referred to in the Valuation Rules by definition, and therefore it is this value to be considered and applied to Rule 6.

3. On this prima facie view, we waive deposit of the duty demanded of Rs. 11.17 lakhs and penalty of Rs. 10,000/-. The order of detention dated 15.3.00 passed by the Dy. Commissioner to recover the duty in this case is hereby accordingly vacated.