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2013 (10) TMI 403 - AT - Central ExciseMRP Based duty - Valuation - manufacture of Cement - supply to construction company - Interpretation of Rule 3 of Packaged Commodity Rules - Waiver of Pre-deposit - Held that - Construction company are covered by the expression Institutional Consumers appeared in Rules Following Grasim Industries Ltd. vs. CCE, Jaipur II 2003 (12) TMI 230 - CESTAT, NEW DELHI Addition of the word institutional in new Rule 3 is not making much difference inasmuch as the wider expression any other services institutional consumer remains to be there in new rule 3 - The expression institutional has already been interpreted to cover the construction company - Prima facie new Rule 3 would also cover the case in issue - the condition of pre-deposit of duty and penalty dispensed unconditional stay granted.
Issues:
1. Interpretation of notification No. 4/2006 Sl. No. 1(C) regarding exemption for Package cement. 2. Application of Packaged Commodity Rules and Legal Metrology (Packaged Commodities) Rules, 2011 to construction companies for duty exemption. 3. Impact of the introduction of the word "institutional" in Rule 3 of the new Legal Metrology Rules on the eligibility of construction companies for benefits. Issue 1: Interpretation of notification No. 4/2006 Sl. No. 1(C): The dispute in this case revolves around the availability of exemption under notification No. 4/2006 Sl. No. 1(C) for Package cement without the requirement to declare the Maximum Retail Price (MRP) in accordance with Packaged Commodity Rules. Previous Tribunal decisions, such as Grasim Industries Ltd. vs. CCE, Jaipur II, have established that construction companies fall under the category of Institutional Consumers as per the Rules. The appellants, engaged in cement manufacturing, sought this exemption. Issue 2: Application of Rules to construction companies: With the repeal of Packaged Commodity Rules and the enforcement of the new Legal Metrology (Packaged Commodities) Rules, 2011 from April 1, 2011, a change occurred in the definition of institutional consumers by introducing the term "institutional" in Rule 3. Lower authorities denied duty exemption to cement cleared by the appellant for construction companies, arguing they did not qualify as institutional consumers under the new Rules. Issue 3: Impact of the term "institutional" in new Rule 3: Upon examining Rule 2 of Packaged Commodity Rules and Rule 3 of the new Legal Metrology Rules, the Tribunal found that the inclusion of "institutional" in Rule 3 did not significantly alter the broader scope of "any other services" for institutional consumers. The term "institutional" had been previously interpreted to cover construction companies. Therefore, the Tribunal held that the new Rule 3 would also encompass the case at hand, leading to the decision to dispense with the pre-deposit of duty and penalty, allowing the stay petition unconditionally. This judgment clarifies the interpretation and application of notification No. 4/2006 Sl. No. 1(C) and the impact of regulatory changes on the eligibility of construction companies for duty exemption under the relevant Rules.
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