2014 (3) TMI 345 - AT - Central Excise

Interpretation of Notification No. 4/2007-C.E. - Manufacturing of Cement - Declaration of retail sale price - Contention of Revenue that retail sale price affixed to avail concessional rate of duty prescribed in the Notification No. 4/2007-C.E. - Held that - first requirement is that the RSP of the goods is not required to be declared and the second requirement is it is not declared. In this case, because of the provisions of Rule 2A of SWMPC Rules, there is no dispute that appellants were not required to indicate the RSP on the bags. Nevertheless, they declared the RSP. However they are not hit by the proviso because the proviso is attracted only when both the requirements are fulfilled. The letter from the Legal Metrology also considers this aspect and has clarified that APSHCL comes in the institutional category and therefore in respect of the clearances to them RSP need not be declared. For the appellant s own consumption also, it comes under the category of industrial consumption. Therefore, RSP may not be required to be declared. What is to be noted is that in the case of cement bags which are of 50 kg. or less, the rule is MRP has to be affixed. Rule 2A is an exception. There is no compulsion on any manufacturer not to affix MRP. Affixing MRP is not compulsory when clearances are made to the categories of consumers specified in Rule 2A. In all other cases, it is mandatory - Following decision in the case of Sagar Cements Ltd. 2010 (4) TMI 418 - CESTAT, BANGALORE - Therefore, appellants have made out a case for complete waiver and stay. Accordingly, the requirement of pre-deposit is waived and stay against the recovery of dues is granted during the pendency of the appeal - Stay granted.

Summary

Issues:
Interpretation of Notification No. 4/2007 regarding duty rate on cement clearances with MRP affixed, applicability of Rule 2A of SWMPC Rules to clearances for self-consumption and to institutions, impact of Legal Metrology Department's letter on RSP declaration, comparison with previous judgments, correct interpretation of the proviso to the Notification, waiver and stay of recovery during appeal.

Analysis:
The case involved the appellants clearing cement to Andhra Pradesh State Housing Corporation Ltd. (APSHCL) and for self-consumption during March 2007 to February 2008. The issue revolved around the duty rate applicable when the Maximum Retail Price (MRP) was affixed on the bags. The Revenue contended that clearances to APSHCL and for self-consumption fall under Rule 2A of SWMPC Rules, requiring no MRP declaration, thus attracting a higher duty rate of Rs. 400/- per tonne. Consequently, proceedings were initiated, leading to a demand for differential duty of Rs. 8,70,195/- with penalties.

The appellant argued that the case was similar to a previous Tribunal decision upheld by the Supreme Court, where MRP was affixed, and the duty rate under Notification No. 4/2007 was correctly applied. On the other hand, the Additional Commissioner contended that previous judgments differed, emphasizing the Legal Metrology Department's letter stating that RSP declaration was not required for the appellants' clearances. The Commissioner highlighted the proviso to the Notification, indicating duty determination for goods without RSP declaration.

Upon analyzing both arguments, the Tribunal disagreed with the Commissioner's interpretation of the proviso, emphasizing the necessity for both RSP non-requirement and non-declaration. As per Rule 2A, MRP is mandatory for cement bags up to 50 kg, except for clearances to industrial consumers or service providers. The Legal Metrology Department's clarification deemed APSHCL as an institutional consumer and the appellant's self-consumption as industrial, exempting them from RSP declaration. The Tribunal concluded that MRP affixing was not compulsory for specified consumer categories under Rule 2A, aligning with the correct interpretation of the Notification.

Considering the previous Tribunal decision upheld by the Supreme Court, the Tribunal found prima facie applicability to the current case. Consequently, the appellants were granted a complete waiver and stay against recovery during the appeal process, reflecting a fair and just outcome based on the legal analysis presented.