The 'Third Schedule' Confusion
PLEASE see yesterday's DDT for the little known ‘third schedule'. Can a product be assessed under MRP valuation if it figures in the ‘Third Schedule', but does not figure in the notification notifying the abatement for MRP goods? This was one of the questions raised by the Vadodara Zone in the recently held Central Excise Tariff conference.
A doubt had arisen regarding the applicability of section 4A of Central Excise Act, 1944 in respect of excisable products like Dish washing liquid, liquid floor cleaner, liquid toilet cleaners falling under tariff items 34022010 and 34022090. The said goods at present are being cleared in retail packs of 250 ml/500 ml/ 1 litre in open market, under Section 4 of Central Excise Act, 1944, and the manufacturer is paying duty on the transaction value under Section 4 instead of under Section 4A of said Act (MRP based assessment). The sponsoring zone was of the view that the said products are liable for assessment under Section 4A (MRP based assessment) in view of Serial no. 40 of notification no. 49/2008 (N.T) dated 24.12.2008 which prescribes abetment (sic) [perhaps, what they mean is abatement] for assessment under section 4A read with the third schedule of the CEA,44 .
Discussion & Decision: The conference noted that for assessment of any commodity under Section 4A, one of the conditions to be satisfied is that Central Government should have specified it in a notification issued under Section 4A. In the present case, goods under discussion are covered in the third schedule of the Central Excise Act, 1944 but are not covered in the notification no. 49/2008 (N.T) dated 24.12.2008 issued under Section 4A. The scope of entry in the third schedule appeared to be larger than that of the entry in the notification and therefore assessment under Section 4A may not be possible for items not covered under the notification no. 49/2008 (N.T) dated 24.12.2008. Concerned zone may take final decision in light of the facts of the case and the case law cited.
Why do you need two lists and unlimited confusion? Anyway, the conclusion is that MRP valuation is applicable only to the goods listed in the notification and not in the third schedule alone.