2012 (12) TMI 27 - AT - Central Excise

Waiver of Pre deposit of Duty u/s 35F Transaction value versus MRP based value - Assessee manufacture insecticides on job works basis Held that - . Rule 2A(a) provides exemption from printing MRP on the packages more than 25 kgs. Admittedly, in this case, the packages cleared by the appellant were of 25 kgs. and not more than 25 kgs., as such, Rule 2A does not help the appellant. Regarding industrial use - held that - Purchasing concern was admittedly involved in trading and did not put the goods to industrial use. - prima facie against the assessee - Therefore 50% of duty demand is waived.

Summary

Issues:
1. Whether duty is required to be paid on packages of 25 kgs. based on declared MRP under SWM (PC) Rules.
2. Whether the appellant correctly valued 25 kgs. packages under Section 4 of the Central Excise Act, 1944.
3. Whether the appellant's plea of limitation regarding the Department's knowledge is valid.
4. Whether the exemption from declaring MRP on packages over 25 kgs. applies to the appellant's case.
5. Whether M/s Bayer Crop Science Ltd. qualifies as an industrial consumer.
6. Whether the appellant concealed material facts regarding the valuation of 25 kgs. packages in the ER-1 return.
7. Whether the appellant is entitled to a complete waiver of the duty demand.

Analysis:

1. The appellant manufactured insecticides for M/s Bayer Crop Sciences Ltd. and paid duty based on MRP for packages under 25 kgs. For 25 kgs. packages, duty was paid on transaction value. The Department issued a notice for differential duty, contending that MRP should be declared for all packages. The appellant argued that 25 kgs. packages were for industrial consumers and not subject to MRP declaration under SWM (PC) Rules.

2. The appellant asserted that 25 kgs. packages were supplied to an industrial consumer, thus correctly valuing them under Section 4 of the Central Excise Act, 1944. The appellant also claimed that the Department had knowledge through regular filings, challenging the invocation of extended limitation.

3. The Revenue argued that the exemption from MRP declaration applied to packages over 25 kgs., not 25 kgs. packets. They contended that M/s Bayer Crop Science Ltd. did not qualify as an industrial consumer, as they repacked pesticides without using them for industrial production. The Department alleged concealment in the ER-1 return, indicating a limitation issue.

4. The Tribunal examined the definition of industrial consumer and found that M/s Bayer Crop Science Ltd. did not meet the criteria, as they were registered as a dealer, not an industrial producer. The appellant's claim that the company repacked and marketed the products, rather than using them in production, further supported this finding.

5. Regarding limitation, the Department argued that the appellant concealed facts about supplying 25 kgs. packages without MRP to industrial consumers. The Tribunal held that limitation issues involve complex legal considerations and could not be conclusively determined at the prima facie stage.

6. The Tribunal concluded that the appellant was not entitled to a complete waiver of the duty demand. Instead, they directed the appellant to deposit 50% of the duty demand within six weeks. Compliance was scheduled for a future date pending further proceedings.

This detailed analysis covers the issues raised in the judgment, providing a comprehensive understanding of the legal arguments and findings presented by both parties.