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2017 (12) TMI 138 - AT - Central ExciseValuation - Insulating Varnish falling under Chapter 3208 - Whether the appellant is required to pay the duty as per the Section 4A of the Act or Section 4 of the Act? - Held that - the appellant is manufacturing Insulating Varnish in the packages of 5Kgs, 25Kgs and 205Kgs and affixing the MRP. At the time of the manufacturing of the said goods, the appellant is not known whether these goods are being sold to the industrial consumers or through whole seller or not - there is no allegation that at the time of manufacturing, the appellant was knowing that the goods are meant for industrial consumers. There is no marking on the containers that the goods are meant for industrial use. Therefore, the appellant is not entitled for exemption under Rule 34 of the said Rules. Reliance placed in the case of H & R JOHNSON (INDIA) LTD. Versus COMMISSIONER OF CENTRAL EXCISE, RAIGAD 2014 (6) TMI 453 - CESTAT MUMBAI , where it was held that 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 - the appellant is not required to pay the duty under Section 4 of the Act and they have correctly paid the duty under Section 4A i.e. the MRP less abatement. Time limitation - Held that - it is clear that at the time of manufacturing of the said goods, it was not known to the appellant that whether these goods meant for the industrial consumers or for retail sale. In that circumstances, suppression is absent from the facts of the case - extended period not invokable. Appeal allowed - decided in favor of appellant.
Issues Involved:
1. Whether the appellant is required to pay the duty as per Section 4A of the Central Excise Act, 1944 or Section 4 of the Act. 2. Whether the extended period of limitation is invokable in the facts and circumstances of the case. Issue 1: Duty Payment under Section 4A or Section 4 of the Central Excise Act, 1944 The appellant, a manufacturer of Insulating Varnish, affixes MRP on packages of 5 Kgs, 25 Kgs, and 205 Kgs and pays duty under Section 4A of the Central Excise Act, 1944. The audit revealed that some goods were sold to industrial buyers without MRP, invoking Section 4 of the Act for transaction value duty. The appellant argued that goods sold to industrial consumers were not marked as such on the packages, thus justifying the duty paid under Section 4A. Supporting precedents included H&R Johnson (India) Ltd. Vs. CCE, Raigad and Nitco Tiles Vs. CCE, Raigad, along with the Supreme Court decision in Jayanti Food Processing Pvt. Ltd. Vs. CCE, Rajasthan. The Tribunal found that the appellant did not know at the time of manufacturing whether the goods were for industrial consumers, and the packages did not indicate such use. Therefore, the appellant was not entitled to exemption under Rule 34 of the Standards of Weights and Measures (Packaged Commodity) Rules, 1977. The Tribunal referenced similar cases, concluding that the appellant correctly discharged duty under Section 4A, as the goods were intended for retail sale, even if sold in bulk to industrial buyers. Issue 2: Extended Period of Limitation The appellant regularly filed declarations under Rule 173C of the Central Excise Rules, 1944, stating duty payment under Section 4A. The appellant contended that the show cause notice was barred by limitation due to the absence of mens rea or suppression of facts. Cited cases included Padmini Products Vs. Collector of Central Excise and Tamil Nadu Housing Board Vs. Collector of Central Excise, Madras. The Tribunal found no evidence of suppression, as the appellant was unaware at the time of manufacturing whether the goods were for industrial use. The appellant's declarations and compliance with Section 4A indicated no mala fide intention. Consequently, the extended period of limitation was not invokable, making the demand unsustainable. Conclusion The Tribunal held that the appellant correctly paid duty under Section 4A and was not liable for duty under Section 4. The extended period of limitation was not applicable due to the absence of suppression. The appeal was allowed, setting aside the impugned order, with the appellant succeeding on both merits and limitation.
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