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2017 (8) TMI 95 - AT - Central ExciseMethod of Valuation - MRP based or transaction value - wholesale package - Whether the appellant assessee have paid excise duty correctly under the provisions of Section 4 of the Act, instead of Section 4A? - extended period of limitation - manufacture of 9gm. purias/pouch of their product with effect from 01/03/2004 to 31st of March 2008 - Held that - wholesale package have been defined in the Package Commodity Rules as meaning a package containing -(i) Retail packages, where such first mentioned package is intended for sale, distribution or delivery to an intermediary and is not intended for sale direct to a single consumer, or (ii) a commodity sold to an intermediary in bulk to enable such intermediary to sell, distribute or deliver such commodity to the consumer in similar quantities, or (iii) packages containing 10 or more than 10 packages provided that the retail packages are labeled as required under the Rules. Accordingly, we find that the larger pouches containing more than 10, under the admitted facts, 20/27 Purias are wholesale packages. Further we End that there is no material on record that such wholesale packages were marked with MRP or where intended for retail sale. The appellant was entitled to assessment to duty under the provisions of Section 4 of the Central Excise Act in respect of the retail packages in question - appeal allowed - decided in favor of appellant.
Issues Involved:
1. Correctness of excise duty payment under Section 4 instead of Section 4A of the Central Excise Act. 2. Validity of the show cause notice concerning the extended period of limitation. Detailed Analysis: 1. Correctness of Excise Duty Payment under Section 4 Instead of Section 4A of the Central Excise Act: The primary issue in the appeals was whether the appellant correctly paid excise duty under Section 4 of the Central Excise Act, 1944, instead of Section 4A. The appellant, a manufacturer of branded chewing tobacco under the brand name 'MOAR CHHAP,' started manufacturing 9gm pouches of their product from March 1, 2004, and paid excise duty under Section 4, claiming exemption from marking MRP under Rule 34 of the Standard of Weights and Measures (Packaged Commodities) Rules, 1977 (SWAMPCR). The appellant informed the jurisdictional Assistant Commissioner about this change through letters dated February 19, 2004, and March 1, 2004. They continued to file returns and pay taxes under Section 4. However, during an inspection on April 1, 2009, it was found that the appellant had printed MRP on the 9gm pouches and cleared them in multi-piece packs of 20 or 27 pouches. The Revenue argued that the exemption under Rule 34 of SWAMPCR was not applicable as the pouches were sold by MRP/RSP in numbers, not by weight or measure. The Revenue also noted that the multi-piece packages were subject to MRP marking under Rule 17 of SWAMPCR, making them liable for assessment under Section 4A. The Revenue relied on several rulings, including Jayanti Food Processing Private Ltd. vs. CCE and Vernica Herbs vs. CBEC, which supported their stance that multi-piece packages are subject to MRP-based assessment. The Tribunal, however, found that the larger pouches containing 20/27 purias were wholesale packages intended for intermediaries and not for direct retail sale. There was no evidence that these wholesale packages were marked with MRP or intended for retail sale. Consequently, the Tribunal held that the appellant was entitled to assess duty under Section 4 for the retail packages and set aside the impugned order. 2. Validity of the Show Cause Notice Concerning the Extended Period of Limitation: The second issue was whether the show cause notice was barred by the extended period of limitation. The Tribunal did not explicitly address this issue in the judgment, focusing instead on the primary issue of the correct section for duty assessment. However, by setting aside the impugned order and allowing the appeals, the Tribunal implicitly ruled in favor of the appellant on this issue as well. Conclusion: The Tribunal concluded that the appellant correctly assessed and paid excise duty under Section 4 of the Central Excise Act, 1944, for the retail packages in question. The larger pouches containing 20/27 purias were considered wholesale packages not subject to MRP marking and therefore not liable for assessment under Section 4A. The Tribunal set aside the impugned order and allowed the appeals with consequential benefits to the appellants.
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