2005 (11) TMI 315 - AT - Central Excise

Summary

Issues:
1. Assessment of duty under Section 4A of Central Excise Act for small pouches containing 6 grams of chewing tobacco.
2. Interpretation of whether group packages are intended for retail sale.
3. Exemption under Rule 34B of the Packages Commodity Rules for affixing Maximum Retail Price (MRP) on packages containing less than 20 grams.

Analysis:

Issue 1: Assessment of duty under Section 4A
The dispute revolves around whether chewing tobacco packed in 6 grams pouches is liable for duty under Section 4A of the Central Excise Act. The appellant argued that as per the Standards of Weights & Measures Act, no MRP is required for packages containing less than 20 grams, supported by a clarification from the competent authority. Additionally, Rule 34B exempts MRP affixing on 20 grams or 20 ml packages. The Revenue contended that group packages, including 33 small packs and one 15 gram pack, are intended for retail sale, necessitating MRP. However, the Tribunal found no evidence supporting this claim.

Issue 2: Interpretation of group packages
The appellant maintained that the group package, comprising small pouches and a 15 grams pack, was not meant for retail sale. The Revenue argued that since the small pouches were intended for retail sale while the group packages were for wholesale, duty under Section 4A applied. The Tribunal noted the absence of evidence proving the group package's retail intent, supporting the appellant's stance.

Issue 3: Exemption under Rule 34B
The Tribunal considered Rule 34B of the Packages Commodity Rules, which exempts MRP affixing on packages under 20 grams. The appellant referenced a similar case involving Gupta Tobacco Co., where packages with less than 10 grams were assessed under Section 4. Given the appellant's strong case and the package's retail intent with less than 20 grams of tobacco, the Tribunal waived the pre-deposit of duty and penalty, allowing the stay petition.

In conclusion, the Tribunal ruled in favor of the appellant, emphasizing the lack of evidence supporting the Revenue's claims regarding the group package's retail intent and the applicability of Section 4A for small pouches. The exemption under Rule 34B further supported the appellant's position, leading to the waiver of pre-deposit and allowance of the stay petition.