The Mumbai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), quashed excise duty demand, thereby granting relief to M./s, Honda Cars.
The appeal of M/s Honda Cars India Ltd lies against order of Commissioner of Central Excise (Appeals– II), Mumbai which upheld the confirmation of demand of ₹ 49,41,692/- towards duties of central excise under Central Excise Act, 1944 for the period from December 2011 to July 2012, along with applicable interest under section 11AB of Central Excise Act, 1944, and penalty of like amount under section 11AC of Central Excise Act, 1944.
It was contended by the Chartered Accountant appearing for the appellant that the issue stands covered by the decision of the Tribunal in their own clearances for the period from March 2010 to November 2011 in Honda Motor India Pvt Ltd v. Commissioner of Central Excise, Mumbai – II wherein it was observed that “Central Excise Duty is leviable on the goods falling under section 4A of the Central Excise Act, 1944 with respect to the MRP declared on the packages at the time of their clearance from the factory and not with respect to that declared on the bill of entry at the time of their importation. I find that since the noticee has paid the Central Excise Duty on the basis of MRP declared on the package of the goods at the time of their removal from Panvel warehouse, they are not liable to pay any differential duty. In view of the above, I am of the view that the demand raised in the impugned SCN is no sustainable in the eyes of the law and therefore in am inclined to drop the same.”
A Two-Member Bench of the Tribunal comprising Ajay Sharma, Judicial Member and CJ Mathew, Technical Member observed that “The goods imported by the appellant are ‘repacked’ after clearance from customs control and such activity being manufacture erases the ‘import’ that had taken place earlier to be superimposed with production of excisable goods in the hands of the manufacturer and subject to valuation under section 4A of Central Excise Act, 1944 for assessment to duties of central excise. The affixing of ‘retail selling price (RSP)’ thereupon becomes the first, and final, declaration of price for assessment under Central Excise Act, 1944.”
“There are, thus, no two prices and, therefore, the Explanation 2(a) below section 4A of Central Excise Act, 1944 would not come into play. In the case of the appellant for the earlier period, the issue has been decided by the Tribunal in their favour. Accordingly, nothing remains in the demand confirmed in the impugned order which is set aside along with charging of interest and imposition of penalty to allow the appeal” the Bench concluded.
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