The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) held that the assessable value of shampoo sachet is to be done under Section 4 of the Central Excise Act, 1944.
The appellant is engaged in the manufacture of shampoos falling under Chapter 33 of the Central Excise Tariff Act, 1985. The appellant was clearing shampoo in packaged form determining the value under Section 4, as well as Section 4A of the Central Excise Act.
It was noted by the department that the appellant cleared the shampoos in pouches/sachets without indicating any measure or weight on it and therefore it appeared that the appellant is not eligible for the exclusion provided under said Rule 34 of SWMPC Rules 1977.
The department was of the view that the assessable value of shampoos contained in pouches/sachets of less than 10ml has to be assessed under Section 4A itself. Show Cause Notice dated 03.01.2012 was issued to the appellant for the period from 01.12.2010 to 30.04.2011 proposing to demand differential duty to the tune of Rs.13,38,052/- by determining the assessable value of these pouches under Section 4A of the Central Excise Act, 1985.
The issue to be considered is whether the assessable value of the shampoo in sachets/pouches containing 10ml or less than 10 ml is to be determined under Section 4 or 4A of Central Excise Act, 1944. As per Rule 26 (a) of LMPCR, 2011, it is not required to affix MRP on a packing, when the quantity contained in such packings is 10gms or less or 10ml or less.
The counsel for the appellant submitted that there is no requirement of affixing MRP on the commodity, when the quantity is less than 20ml. Subsequently, with effect from 01.04.2011 and after the introduction of Legal Metrology Act, Rule 26(a) of Legal Metrology ( Packaged Commodity ) Rules 2011, exempted commodities where the net weight or measure is less than 10 grams or 10ml, under the said Rules.
A Two-Member Bench comprising Vasa Seshagiri Rao, Technical Member and CS Sulekha Beevi observed that “Further, in the appellant’s own case vide Final Order N0.40032/2020 dated 28.01.2020, the Tribunal followed the above decision to set aside the demand raised under Section 4A and held that the determination of assessable value is to be done under Section 4 of the Central Excise Act, 1944. Following the decision of the Tribunal in the appellant’s own case for the earlier period, we are of considered opinion that the demand under Section 4A cannot sustain.”
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