2016 (10) TMI 233 - AT - Central Excise

Evasion of duty - packing of excess cement of about 200 gms. in each bag - weight declared was of 50 kgs - Standard of Weights and Measures (Packaged Commodities) Rules, 1977 - whether excess packing of 200 gms. of cement per bag amounts to evasion of tax? - Held that - in CBEC Circular No.876/14/2008-CX, dated October 20, 2001, there is a provision to allow 1% variation in weight for the cement filled in per bag for the purpose of levy of central excise duty. It means that 1% cement in excess or loss for each bag is allowable. Reference can also be made to Standard of Weights and Measures (Packaged Commodities) Rules, 1977, wherein 1% variation for cement bag is allowable. The weight of 50.200 kgs. per bag found by the Department - same is allowable being within the range of 1% variation - appeal dismissed - decided against Department.

Summary

Issues:
- Appeal against order passed by Commissioner, Central Excise regarding duty evasion on excess cement packing.

Analysis:
The appeal was filed by the Department challenging the order passed by the Commissioner, Central Excise, Jaipur II, dated 5.3.2009. The case involved an assessee engaged in manufacturing cement, where it was discovered that the assessee was packing more than the declared weight of 50 kgs per bag, leading to a suspicion of duty evasion on the excess cement. The Department contended that duty was being discharged only on 50 kgs per bag, despite the actual weight being higher.

During the proceedings, both sides presented their arguments. The Department's representative highlighted the discrepancy in weight and the potential duty evasion, while the respondent's counsel explained that the excess packing was to ensure customers received at least 50 kgs due to handling and transit concerns. The respondent's argument was supported by a provision in a CBEC Circular and the Standard of Weights and Measures (Packaged Commodities) Rules, allowing a 1% variation in weight for cement bags.

Upon reviewing the records and considering the arguments presented, the Tribunal found that the excess weight packed by the assessee was within the permissible 1% variation allowed for cement bags. Referring to the relevant circular and rules, the Tribunal concluded that the weight of 50.200 kgs per bag was acceptable. Consequently, the Tribunal upheld the impugned order passed by the Commissioner, Central Excise, and dismissed the Department's appeal. The cross-objection was also disposed of in the same judgment.