2017 (11) TMI 751 - AT - Central Excise

Valuation - clearance of final product in packets of 25Kg - it was contended by appellant that the duty stands again paid by them on the 5kgs packages and there was no requirement to pay any duty on 25Kgs packings in terms of Section 4A of the Act - Section 4A of the Central Excise Act - Held that - the Tribunal directions have not been carried out by the adjudicating authority in spirit and no efforts have been made by them to find out to whether 25Kg packages sold to M/s Bayer, required affixation of MRP under Weight and Measures Act. Similarly, there is no evidence produced by the Revenue that such 25kg packages are ultimately sold in retail either by the appellant or by M/s Bayer Crop Sciences, thus requiring affixation of MRP - The limitation aspect has not been examined from the Revenue neutrality angle - appeal allowed by way of remand.

Summary

Issues:
1. Applicability of duty under Section 4A of the Central Excise Act.
2. Interpretation of whether 25kg packages are retail packages.
3. Compliance with Tribunal's directions by the adjudicating authority.
4. Invocation of extended period of limitation.

Issue 1: Applicability of duty under Section 4A of the Central Excise Act:
The appellant, engaged in the manufacturing of pesticides and insecticides, faced a demand for duty under Section 4A of the Central Excise Act. The dispute arose as the appellant contended that duty was not required on 25kg packages, as they were repacked into smaller units and duty was paid on those units under Section 4A. The Tribunal remanded the matter for further consideration, emphasizing the need to verify whether the 25kg packages required MRP under the Weights and Measures Act. The appellant provided evidence supporting their claim that duty was already paid on the repacked units, thus challenging the differential duty demand.

Issue 2: Interpretation of whether 25kg packages are retail packages:
The Commissioner upheld the differential duties, asserting that the 25kg packages were covered by Section 4A and not exempt as industrial consumer goods. The Commissioner noted that there was no evidence of the 25kg packages being sold at retail or used for industrial consumption. The appellant argued that the Tribunal's directions were not followed, and the packages were not meant for retail sale. The appellant clarified that they started affixing MRP on 25kg packages post the disputed period to comply with Revenue's objections, even though there was no financial loss.

Issue 3: Compliance with Tribunal's directions by the adjudicating authority:
The Tribunal found that the adjudicating authority did not adequately consider whether the 25kg packages required MRP and failed to verify if the packages were ultimately sold at retail. The Tribunal emphasized the need for a fresh decision by the Commissioner in line with their earlier directions, indicating a lack of thorough examination by the adjudicating authority.

Issue 4: Invocation of extended period of limitation:
The Commissioner upheld the invocation of the extended period of limitation, leading to the denial of benefits to the appellant. The appellant's advocate argued against this decision, emphasizing that there was no suppression of facts and that the audit history did not raise any objections. The Tribunal's directions regarding the extended period were not fully addressed, prompting a remand for a fresh decision.

In conclusion, the Tribunal allowed the appeal by remanding the matter to the Commissioner for a fresh decision in accordance with their earlier directions, highlighting the need for a comprehensive examination of the issues raised by the appellant regarding duty applicability, package classification, compliance with Tribunal directives, and the invocation of the extended period of limitation.