2012 (3) TMI 350 - AT - Central Excise

Duty demand - Whether 25 kgs. packages of insecticides and pesticides cleared by the appellant to a registered dealer can be considered to be retail packings meant for an ultimate consumer, so as to print the same with MRP or not - Held that - MRP is printed on such retails packages and the same are cleared by them on payment of duty on MRP affixed on the said packages - it has to be, at this prima facie stage, arrived at that such factual contention is correct and does not stand rebutted by the adjudicating authority. If that be so, we are of the view that 25 kgs. packages sent to the dealer are not retail packages as the Revenue has not come up with any evidence to show that these 25 kgs. packages also go to the market in retail sale and are meant for consumption by the ultimate consumer. On the said ground, we find that the appellant has a good prima facie case in its favour so as to allow stay unconditionally - Stay granted.

Summary

Issues:
1. Duty confirmation and penalty imposition for the period 2006-2007 to July 2010 on the basis of Section 4A.
2. Dispute over whether 25 kgs packages sent to the principal are retail packages requiring MRP.
3. Allegation of demand on the point of limitation.
4. Commissioner's rejection of appellant's stand regarding the nature of the 25 kgs packages.
5. Consideration of the appellant's plea regarding the conversion of 25 kgs packages into 5 kgs retail packages.
6. Decision on the stay petition and remand of the matter to the Commissioner for further examination.

Analysis:
1. The duty confirmed against the applicant amounted to Rs. 1,43,06,891/- with an equal penalty. The duty was imposed for the period 2006-2007 to July 2010 based on a Show Cause Notice alleging liability under Section 4A instead of Section 4. The appellant disputed this duty imposition.

2. The appellant argued that the 25 kgs packages sent to the principal were not retail packages and thus did not require an MRP. They contended that only retail packs necessitated an MRP as per the Standards of Weights and Measures Act, which the 25 kgs packages did not fall under.

3. The appellant challenged the demand on the grounds of limitation, asserting that no objections were raised during audits or while filing returns. They argued that the duty payment was made as per Rule 4 without any prior objection from the Central Excise authorities.

4. The Commissioner did not accept the appellant's claim that the 25 kgs packings were manufactured on a job work basis. The Revenue argued that the principal, a registered dealer, should be considered an ultimate consumer, making the goods subject to retail sale.

5. The Tribunal found in favor of the appellant, noting that the 25 kgs packages were not retail packages as they were further converted into 5 kgs retail packs by the dealer. The Commissioner failed to address this conversion process, leading to the Tribunal's decision to remand the matter for reconsideration.

6. The Tribunal allowed the stay petition and remanded the case to the Commissioner for a thorough examination of the appellant's contentions regarding the conversion of packages. The limitation issue was left open for further consideration during the remand proceedings. Both parties agreed on the remand decision, and the matter was disposed of accordingly.