Goods sold exclusively to industrial or institutional consumers and labeled 'Not for retail sale' are exempt from MRP-based valuation under Section 4A of the Central Excise Act, 1944, and must be assessed under Section 4 based on the transaction value.

PER: P.A. AUGUSTIAN

The issue in the present appeal is whether the valuation should be adopted under Section 4 or Section 4 A of the Central Excise Act, 1944.

2. The Brief facts are the Appellant is engaged in manufacture of LED Light Fixtures and Solar Lights. Alleging that the Appellant has not adopted MRP based valuation under Section 4 A of the Central Excise Act, 1944, proceedings were initiated and on completion of the investigation, show cause notice was issued on 06.03.2020 for the period from 23.09.2015 to 30.06.2017 and Adjudicating Authority as per impugned order rejected the valuation under Section 4 of the Central Excise Act and held that the goods should be revalued by adopting MRP based valuation under Section 4 A of the Central Excise Act, 1944, confirmed the differential demand with interest and also imposed equal amount of penalty under Section 11AC(1)(c) of the Central Excise Act, 1944. Aggrieved by said order, present appeal is filed.

3. When the appeal came up for hearing, Learned Counsel for the Appellant submits that the Appellant used to clear used LED street light fixtures to its customer by adopting MRP based valuation for the period from 01.03.2015 to 22.09.2015. However, with effect from 23.09.2015, in respect to LED street light fixtures manufactured and cleared to M/s. Havells, across India, the Appellant changed the mode of valuation from MRP based valuation under Section 4 A to valuation under Section 4 of the Central Excise Act, 1944 by adopting the prices of Havells as per Purchase Order No. 4501384313 dated 05.03.2016 by affixing a label “Not for Retail Sale, for Industrial /Institutional use only”. This method is adopted as per the terms and conditions in Legal Metrology (Packages Commodities Amendment) Rules, 2015 which was introduced vide Notification dated 14.05.2014 and M/s. Havells Informed that they were further supplying the said LED streetlights to the industries. The Learned Counsel for the Appellant further submits that the entire case is built up on the allegation that Appellant does not sell the goods to industrial /institutional customer in terms of Rule 2(bb) and (bb) of LMPC Rules, 2015 and due to that reason Appellant is liable to adopt the valuation under Rule 4A of the Central Excise Act. In this regard, Learned Counsel draws our attention to the letter of Award issued by the Energy Efficiency Service Ltd. (EESL) a joint venture PSU of Ministry of Power, Government of India and submits that as per said award M/s. Havells placed purchase order on Appellant to manufacture and supply said LED streetlights intended for sale to EESL. In terms of referred purchase order, Appellant manufactured said goods and cleared the goods to Havells under excise invoices. In addition to the above supplies, M/s. Havells supplied LED Street light fixture to M/s. Mheshtala Municipality, West Bengal (hereinafter referred to as "Municipality). The said LED Street light fixtures were supplied by the Appellant to M/s. Havells - Sample invoice to M/s. Mheshtala Municipality, by M/s. Havells is submitted. Further, M/s. Havells sold the goods received from the Appellant to industrial /institutional buyers viz., Surat Municipal Corporation, Navsari Nagar Palika, Directorate of Urban Local Bodies (Government of Jammu and Kashmir) through their dealer's network. The total value of the goods so supplied to industrial / institutional buyers was Rs. 34,52,73,048/-.

4. The learned Counsel for the Appellant submits that it is for the Legal Metrology Department of the State Government to decide as to whether the products /goods are exempted under Rule 3 of the LMPC Rules, 2015