1992 (5) TMI 199 - AT - Central Excise

Summary

Issues:
- Challenge to duty demand for excess filling of retail packings of Ultramarine Blue
- Allegation of evasion of duty by filling packs with more weight than marked
- Imposition of penalty of Rs. 5,000
- Interpretation of duty payment basis: ad valorem vs. weight basis
- Compliance with the Weights and Measures Act
- Justification for over-packing by the appellant
- Revenue significance of over-packing
- Assessment of duty linked to value, not quantity
- Consideration of penalty imposition without mens rea
- Comparison with relevant legal precedents

Analysis:

The case involved two appeals challenging the duty demand and penalty imposed by the Additional Collector for alleged excess filling of retail packings of Ultramarine Blue. The appellant argued that the duty is ad valorem based and not on weight, justifying the over-packing as a precaution to comply with the Weights and Measures Act and ensure customer satisfaction without price increase. The Departmental Representative contended that the over-packing resulted in loss of potential revenue for the Department. The Tribunal analyzed the situation, emphasizing that duty assessment is linked to value, not quantity, thus the charge of misstatement regarding the packed weight loses significance. The Tribunal noted the absence of data on actual weight loss during transit and storage, suggesting a review of the over-packing practice by the appellant. The Tribunal found the duty demand projection unjustified and the penalty imposition unsupported, citing legal precedents regarding mens rea in penalty cases. The Tribunal allowed the appeals, setting aside the penalty and duty demand, dismissing the Department's Cross Objection for penalty enhancement.