2006 (4) TMI 309 - AT - Central Excise

Summary

Issues:
1. Challenge to the order of provisional assessment and payment of differential duty amount.
2. Interpretation of whether "sanitaryware" items wrapped in grass/haystack are liable for excise duty.
3. Application of Standards of Weights and Measures (Packaged Commodities) Rules, 1977.
4. Determination of whether the goods were intended to be sold in pre-packed condition.
5. Analysis of whether the goods were sold to the ultimate consumer in a packed form.

Issue 1 - Challenge to the order of provisional assessment and payment of differential duty amount:
The appellant contested the Commissioner (Appeals) order finalizing the provisional assessment for a specific period and directing the payment of the differential duty amount. The dispute revolved around the amount of Rs. 1,00,35,929/- that the appellant was directed to pay.

Issue 2 - Interpretation of whether "sanitaryware" items wrapped in grass/haystack are liable for excise duty:
The central question was whether the items, specifically "sanitaryware," wrapped in grass/haystack should be subject to excise duty under Section 4A of the Central Excise Act, 1944. The contention was whether such pre-packed items were intended to reach the consumer in that condition, thereby triggering excise duty liability.

Issue 3 - Application of Standards of Weights and Measures (Packaged Commodities) Rules, 1977:
The Commissioner (Appeals) found that the goods manufactured by the appellant fell under the purview of the Standards of Weights and Measures (Packaged Commodities) Rules, 1977. This finding was based on information provided by the Director of Legal Metrology, New Delhi, certifying that the items wrapped in grass/haystack were covered by the said Rules.

Issue 4 - Determination of whether the goods were intended to be sold in pre-packed condition:
The debate centered on whether the goods, despite being wrapped in grass/haystack for transport reasons, should be treated as items intended for sale in a pre-packed condition. The appellant argued that the products were not sold to the ultimate consumer in a packed form, emphasizing the necessity for the commodity to be sold in a packaged form to create liability under Section 4-A.

Issue 5 - Analysis of whether the goods were sold to the ultimate consumer in a packed form:
The critical aspect was whether the excisable goods, even if packaged, were actually sold to the ultimate consumer in a packaged form. The obligation to declare retail price on packages arises when the goods are specified under Section 4A(1) of the Act and sold to the ultimate consumer in a packaged form. The focus was on whether the goods were intended for sale in a packaged form, irrespective of the material used for packing or the manner of packing.

In conclusion, the Tribunal granted an interim stay of the impugned order, considering the circumstances and directing that a specific amount already with the department be treated as a pre-deposit for the appeal hearing. The pre-deposit of the remaining duty amount was waived during the appeal's pendency, with the appeal scheduled for final hearing in due course.