2008 (10) TMI 462 - AT - Central Excise

Cement - Exemption under N/N. 4/2006-C.E - Held that - CBEC, which is to the effect that no RSP requires to be printed on the goods sold to industrial/institutional consumers as defined under the rules framed under the Standards of Weights and Measures Act and that such goods would be covered under Sl. No. 1B or 1C of N/N. 4/2006-C.E. by virtue of the Second Proviso to the Explanation to Sl. No. 1C of the Notification as amended. The Board s clarification squarely covers the case in favor of the assessee - the benefit of the Notification would be admissible to the assessee and the impugned demand is liable to be vacated - appeal allowed - decided in favor of appellant.

Summary

Issues:
Demand of duty and penalty under Notification No. 4/2006-C.E. for cement cleared in 50 Kg. packs to various consumers. Interpretation of the Second Proviso to the Explanation in the Notification. Consideration of CBEC clarificatory letter. Discrepancy in the adjudicating authority's decision based on the Legal Metrology Department's opinion. Applicability of the Notification to goods sold to industrial/institutional consumers.

Analysis:
The case involved a demand of duty and penalty on cement cleared in 50 Kg. packs by the appellants to different consumers, based on the denial of benefits under Notification No. 4/2006-C.E. The Notification prescribed a specific rate of duty for goods falling under a particular category not covered under another section. The appellants argued that their cement should attract the concessional rate of duty under the Notification based on a clarificatory letter issued by the CBEC. The letter clarified that goods sold even in packaged form might not require the retail sale price to be declared, thus falling under the relevant sections of the Notification.

The adjudicating authority had ignored the appellants' argument based on the CBEC letter and instead relied on an opinion from the Legal Metrology Department, which considered the cement packages to be covered under specific provisions. However, it was highlighted that the Legal Metrology expert and the Commissioner had overlooked the crucial aspect that the cement was sold to industrial/institutional consumers, which was a key factor for the benefit under the Notification. The Tribunal found in favor of the appellants, emphasizing that the CBEC clarification supported the applicability of the concessional rate of duty to goods sold to industrial/institutional consumers.

Consequently, the Tribunal held that the benefit of the Notification should apply to the appellants, leading to the vacating of the demand made. The appeal was allowed, and the stay application was disposed of accordingly. The decision was dictated and pronounced in open court, providing a clear resolution to the issues raised in the case.