2014 (6) TMI 453 - AT - Central Excise

MRP Valuation or transaction value - Clearances of tiles - institution buyer - industrial consumers - appellant is discharging duty on these tiles as per the provisions of Sectin 4A - revenue demanded duty on the basis of transaction value under Section 4 - Held that - Goods are required to be supplied in standard packages consisting fixed number of specified tiles. These packages are the same in respect of retail sale also and on these packages the appellant has declared the MRP. In other words, there is no difference in respect of packages of tiles sold to retail consumers or to the so called institutional buyers and all of them are in standard packages, having MRP declared on them. It is also not in dispute that, on the packages, the appellant has not made any declaration that the packages are not meant for retail sale or the packages are meant for use by any specified industry . In the absence of such markings on the packages, it cannot be said that the goods supplied were not in retail packages. In their letter dated 23/02/2012 the Dy. Controller of Legal Metrology, Maharashtra has clarified that according to Rule 3 Packaged Commodity Rules, 2011 the provision regarding mandatory declaration on retail packages are not applicable to the packages meant and marked as industrial/institutional consumers - discharge of duty liability tiles supplied in retail packages to real estate developers / developers, etc. has to be made under Section 4A of the Central Excise Act, 1944. Therefore the impugned demands are not sustainable in law - Following decision of ITEL Industries Pvt. Ltd. vs. Commissioner of Central Excise 2003 (10) TMI 140 - CESTAT, BANGALORE - Decided in favour of assessee.

Summary

Issues:
1. Duty demand confirmation against the appellant for clearances of tiles made to persons other than dealers.
2. Dispute over duty liability under Section 4A of the Central Excise Act.
3. Interpretation of Legal Metrology rules regarding mandatory declarations on retail packages.
4. Applicability of Section 4A versus Section 4 for assessment of duty on goods sold in packages.
5. Compliance with MRP declarations on packages sold to institutional buyers like real estate developers.

Analysis:
1. The judgment involves appeals against an Order-in-Original confirming a duty demand against the appellant for clearances of tiles made to non-dealers. The duty demand, interest, and penalty were imposed, leading to the appeal before the Tribunal.

2. The appellant, a manufacturer of ceramic tiles, argued that duty liability was correctly discharged based on MRP declared on packages under Section 4A. The Revenue contended that sales to institutional buyers like real estate developers should be assessed under Section 4, not Section 4A.

3. The appellant referred to Legal Metrology authorities' clarifications that exempted packages marked for industrial/institutional consumers from mandatory MRP declarations. The absence of specific markings on packages indicated goods were meant for retail sale, supporting the appellant's position.

4. The Tribunal analyzed precedents like Jayanti Food Processing case, emphasizing that goods sold in packages with declared MRPs fall under Section 4A, irrespective of the nature of sale. The Tribunal upheld that duty liability for goods in retail packages should be assessed under Section 4A.

5. Considering the legal interpretations and authorities' clarifications, the Tribunal concluded that duty liability for tiles supplied in retail packages to real estate developers should be under Section 4A. The impugned demands were deemed unsustainable, leading to the appeals being allowed with consequential relief.

This detailed analysis of the judgment highlights the key legal issues, arguments presented by both parties, relevant legal precedents, and the Tribunal's decision based on statutory provisions and clarifications from competent authorities.