SOONER than later this was bound to happen.

Section 4A of the CEA'44 launched with much fanfare in the year 1997 has seen many ups and downs and has been repeatedly amended by the consequent Finance Acts.

Additional consideration

The definition of retail sale price given in Explanation 1 stipulates that the retail sale price is the maximum price at which the packaged goods may be sold to the ultimate consumer, inclusive of a host of elements and the price is the sole consideration for sale. In case the price is not the sole consideration for sale, what could be done with the "additional consideration received" was a grey area and the stand that was taken earlier was that the goods are to be assessed under Section 4 of the CEA'44.

This defect was sought to be rectified to a large extent by the Finance Bill, 2003 which envisaged substitution of sub-section (4) with a new one which proposed that the Central Government shall ascertain "in the prescribed manner" the retail sale price of such goods and the retail sale price so ascertained shall be the deemed retail sale price for the purpose of Section 4A.

Unfortunately, "the prescribed manner" has not yet been laid down by the Central Government by either issuance of any Price Determination Rules in respect of Section 4A nor has the CBEC come out with any guidelines.

The first casualty

In a recent case, the Mumbai Bench of the Tribunal while granting stay against such a confirmed demand observed:-

"Prima facie, Section 4A of the Central Excise Act, 1944 prescribes ascertainment of declared MRP and does not entitle the department to arrive at a MRP since no Rules prescribing such ascertained determination have been framed or shown to us. The order of demand as made along with the penalty, prima facie, cannot be sustained."