2005 (4) TMI 539 - Commissioner - Central Excise

Summary

Issues:
1. Applicability of Section 4A of the Act on goods meant for promotional purposes.
2. Interpretation of Standard of Weights and Measures (Packaged Commodities) Rules, 1977 regarding packages intended for retail sale.
3. Imposition of penalty in the absence of short payment.
4. Applicability of Rule 26 regarding penalty imposition without mens rea.

Analysis:
1. The appeal contested the applicability of Section 4A of the Act on goods not intended for retail sale. The appellant argued that since there was no statutory requirement to declare M.R.P. on the packages, Section 4A should not apply. This contention was supported by a CBEC Circular and previous judicial decisions cited for reference.

2. The judgment delved into the interpretation of the Standard of Weights and Measures (Packaged Commodities) Rules, 1977. It was highlighted that these rules apply to packages intended for retail sale. The presence of a declaration stating "Promotional pack not for retail sale" on the packages reinforced the argument that the goods were not meant for retail sale, further supported by relevant case laws and circulars.

3. Regarding penalty imposition in the absence of short payment, the appellant cited a precedent where it was held that no penalty is imposable in such circumstances. This argument was crucial in challenging the penalties imposed by the lower authority.

4. The issue of penalty imposition under Rule 26 without mens rea was raised by appellant Nos. 2 and 3. They relied on a specific case law to support their contention that penalty imposition under Rule 26 necessitates the presence of mens rea. This argument aimed to contest the penalties imposed on them.

In conclusion, after considering the arguments, case records, and relevant legal provisions, the judgment found in favor of the appellant. It was established that the goods in question, being promotional packs not intended for retail sale, should have been assessed under Section 4 of the Act instead of Section 4A. Consequently, the demand was set aside, and the penalties imposed were deemed unsustainable. The impugned order was overturned, and the appeals were allowed.