2013 (10) TMI 563 - AT - Central Excise

MRP Based value u/s 4A - Applicability of SWM Rules on batteries Waiver of Pre-deposit - Applicability of the Standards of Weights and Measures (Packaged Commodities) Rules, 1977 to their goods viz. Automotive Batteries have been disputed by the applicant much before the issuance of Notification No.02/2006 CE (N.T.) dated 01.3.2006 under Section 4A of CEA, 1944 Held that - It is clear from the said Stay Order of the Hon ble Supreme Court that batteries manufactured by the applicant would not be subjected to the provisions of Standards Weights and Measures Act,1976 and The Standards of Weights And Measures(Packaged Commodities) Rules, 1977during pendency of the Appeals before the Hon ble Supreme Court or untill further Orders of the Hon ble Supreme Court - the Applicant would not be required to affix MRP to their goods during the pendency of the SLP/Appeal before Hon ble Supreme Court. The provisions of Section 4A of CEA, 1944 would not be attracted and accordingly no differential duty is payable by them - the Applicant had discharged duty by determining the value of the goods under Section 4 of CEA,1944 - the present duty demand is on the differential value between Sec.4 value and the value determined by the department under Section 4A of CEA,1944 Prima Facie the applicants could able to make out a case for total waiver of all dues Pre-deposits waived till the disposal Stay granted.

Summary

Issues:

1. Waiver of pre-deposit of duty and penalty imposed under Section 11AC of CEA, 1944.

Analysis:

The appellant, engaged in manufacturing automotive and industrial batteries, faced proceedings initiated by the Department alleging that their goods should be valued under Section 4A of CEA, 1944, instead of Section 4, resulting in demand notices for differential duty. The appellant challenged the applicability of The Standards of Weights and Measures Act, 1976 and Rules to their products in various High Courts. While the Andhra Pradesh High Court ruled in their favor, the Kerala High Court ruled against them. The Supreme Court admitted their SLP against the Kerala High Court judgment and granted a stay on proceedings. The Tribunal noted that the Supreme Court's stay order meant that the batteries were not subject to the Rules, and hence, no differential duty was payable under Section 4A. Therefore, the Tribunal granted a waiver of all dues adjudged and stayed recovery during the appeal's pendency.

2. Dispute over applicability of The Standards of Weights And Measures (Packaged Commodities) Rules, 1977.

The Tribunal observed that the applicability of the Rules to the appellant's automotive batteries had been disputed before the issuance of Notification No. 02/2006-CE (NT) under Section 4A of CEA, 1944. The appellant challenged the Rules in various High Courts, with conflicting judgments. The Supreme Court admitted their SLP against the Kerala High Court's decision and stayed all proceedings under the Rules. As a result, the Tribunal found that the provisions of Section 4A were not applicable, and no differential duty was payable. Consequently, the Tribunal granted a waiver of all dues adjudged and stayed recovery during the appeal's pendency.

This detailed analysis of the judgment highlights the issues of waiver of duty and penalty, as well as the dispute over the applicability of specific rules to the appellant's products. The Tribunal's decision to grant a waiver and stay recovery was based on the Supreme Court's stay order and the absence of applicability of Section 4A under the circumstances.