2007 (5) TMI 67 - AT - Central Excise

Duty payable - Issue arises whether appellant is liable to pay duty in terms of Sec.4 of CEA or whether payment of duty in terms of Sec 4A - Held that appellant is liable to pay duty in terms of Sec 4A

Summary

Issues:
1. Interpretation of duty discharge under Sec. 4 of Central Excise Act vs. Sec. 4A with reference to specific notifications.
2. Applicability of Rule 34(1)(a) of the Packaged Commodity Rules to goods meant for exclusive use in the hotel industry.

Analysis:
1. The main issue in the appeal was to determine whether the appellants were required to discharge duty under Sec. 4 of the Central Excise Act in accordance with Notification No. 3/2001-C.E., or if payment under Sec. 4A by discharging central excise duty less the specified amount as per Notification No. 5/01-C.E. was appropriate. The Tribunal analyzed the nature of the goods, which were color televisions exclusively for use in the hotel industry. It was observed that the packages of the goods did not bear any unambiguous marking indicating exclusive industry use, leading to a conclusion that the goods were not exempt from the Packaged Commodity Rules. Citing relevant precedents, the Tribunal held that duty discharge under Sec. 4A was correct, thereby setting aside the impugned order and allowing the appeal.

2. The second issue revolved around the application of Rule 34(1)(a) of the Packaged Commodity Rules to the goods intended for use in the hotel industry. Despite the assertion that the goods were exclusively for hotel industry use, the absence of specific markings on the packages indicating such exclusive use rendered them ineligible for exemption under the Packaged Commodity Rules. The Tribunal referred to previous decisions, including ITEL Industries Pvt. Limited v. Commissioner of Central Excise, Calicut and Electrolux Kelvinator Limited v. Commissioner of Central Excise, Nagpur, to support its conclusion that the duty liability under Sec. 4A was appropriate in this case. By following the ratio of these decisions, the Tribunal overturned the lower authority's decision and ruled in favor of the appellants.

In summary, the Tribunal's judgment clarified the duty discharge requirements under the Central Excise Act concerning goods intended for specific industries and emphasized the importance of unambiguous markings on packages to determine exemption eligibility under relevant rules. The decision underscored the significance of legal precedents in guiding such interpretations and highlighted the necessity for strict adherence to statutory provisions in excise duty matters.