SC rules excise duty payable on MRP

By Staff
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Google Oneindia News

New Delhi, Aug 26 (UNI) The Supreme Court has held that all companies purchasing goods for selling it to the customers are liable to pay excise duty on the maximum retail price (MRP) printed on the packages.

A bench comprising Justices Ashok Bhan and V S Sirpurkar dismissed the appeals of commissioner of central excise Calicut, Chandigarh, Nagpur, Noida, Ghaziabad and New Delhi against the judgement of the customs, excise and gold (control) appellate tribunal holding that packaged goods and articles are liable to be accessed under Section 4A of the Central Excise Act.

The court also held that the department was however free to proceed against the assessees in accordance with law if the excise duty has not been paid on the MRP.

The court also held that the nature of purchases whether it is in bulk or in retail is irrelevant.

The court also held that the purchases made by intermediary to sell, distribute or deliver the said commodity to the consumer in smaller quantities must pay the duties on MRP and not on the contracted price.

The apex court in its judgement ruled, ''We therefore dismiss all the appeals of the department subject to the observation which we have made as regarding the printing of MRP and also as regards the payment of duties on the basis of contract price and not on MRP in the earlier part.'' The court also ruled that even Kit-Kat chocolate packet given free by Pepsi food companies with their products are liable to be charged on the MRP printed on the wrappers.

The court also dismissed the contention of BSNL, MTNL and DOT that on telephone instruments duty should be charged under section 4 and not under section 4A of the Act.

The court upheld the judgement of the tribunal but gave its own reasoning. The court in its 58-page judgement while deciding 15 appeals also ruled that if more than one MRP's are printed on a packaged product then the excise duty should be levied on the maximum MRP.

The court however allowed the appeals filed by Nestle India Ltd and Jayanti Food Processing Pvt Ltd. The court also recorded the statements of the assessees that they had paid duty on MRP.

The assessees include Electrolux Kelvinator Ltd, Uniword Telecom Ltd, BPL Telecom Pvt Ltd, Himachal Exicom Communication and Explicit trading and marketing Pvt Ltd and ITEL Industries. The court however agreed that mineral water bottle purchased by Jet Airways for being supplied to its passengers and staff members can be charged on the contracted price as these bottles are not been sold to consumers at MRP.

UNI

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