2018 (8) TMI 953 - HC - Central Excise

Principles of Natural Justice - Method of Valuation - Section 4 or 4A of CEA - Held that - Perusal of the impugned orders would also show that the respondents 1 and 3 have not stated anything more than extracting the relevant provision of law, namely, definition of pre-packaged commodity , as defined under section 2(l) of Legal Metrology Act, 2009, and also to indicate that the commodity consisting of tyre, tube or tyre, tube and flaps in the form of package may be considered as pre-packaged commodity , if it falls in the ambit of definition of pre-packaged commodity given under section 2(l) of the Act. When it is evident, apart from the fact that the learned Additional Solicitor General also admitted to the position, that the authorities will consider each and every case on its own merits and in accordance with law, there need not be any apprehension in the minds of the petitioners as though the respondents have pre-determined the matter as per the stand taken in their counter affidavits. Since the learned Additional Solicitor General has given such assurance before this Court that the individual case will be dealt with separately on its own merits and in accordance with law uninfluenced by any of the observations made or stand taken by the respondents in their pleadings or in the impugned proceedings, these writ petitions are disposed of without expressing any view on the merits. Petition disposed off.

Summary

Issues:
1. Challenge to Circular and Enclosure issued by Respondents
2. Interpretation of 'pre-packaged commodity' under Legal Metrology Act
3. Jurisdiction and Natural Justice violation in issuance of Clarification
4. Adjudicating Authority's role in determining 'pre-packaged commodity'

Analysis:

Issue 1: Challenge to Circular and Enclosure issued by Respondents
The writ petitioners, manufacturers of rubber products, challenged Circulars issued by Respondents regarding the classification of their products as 'pre-packaged commodities'. The Circulars referred to the Legal Metrology Act's definition of 'pre-packaged commodity' and indicated that certain products may fall under this definition. The petitioners sought clarity due to inconsistent interpretations by authorities. The High Court noted that each case should be considered individually by the Adjudicating Authority to determine if the products qualify as 'pre-packaged commodities', as assured by the Additional Solicitor General. The Court disposed of the petitions, directing authorities to decide cases based on merits and law, without influence from past statements or pleadings.

Issue 2: Interpretation of 'pre-packaged commodity' under Legal Metrology Act
The Circulars highlighted the definition of 'pre-packaged commodity' under the Legal Metrology Act, stating that products placed in a package with a predetermined quantity, even without the purchaser present, could be considered as such. The Respondents clarified that products like tyres, tubes, and flaps in packaged form might fall under this definition. The Court emphasized that authorities must apply the law and definition of 'pre-packaged commodity' to decide individual cases objectively, as per the Act's provisions.

Issue 3: Jurisdiction and Natural Justice violation in issuance of Clarification
One of the petitions challenged a Clarification issued by a Respondent, alleging excess of jurisdiction and violation of natural justice. However, the Court did not delve into the specifics of this issue, as the Additional Solicitor General assured that each case would be considered impartially and in accordance with the law. The Court directed authorities to decide cases independently, ensuring due process and adherence to legal principles.

Issue 4: Adjudicating Authority's role in determining 'pre-packaged commodity'
The Court emphasized the Adjudicating Authority's responsibility to assess whether a commodity qualifies as 'pre-packaged' based on the Legal Metrology Act's definition. The Court stressed that authorities must evaluate each case on its own merits, applying the relevant laws and definitions without bias or influence from previous statements. The judgment underscored the need for objective decision-making by the authorities to uphold legal standards and ensure fair treatment for all petitioners.

This detailed analysis of the judgment highlights the key issues raised, the Court's observations, and the directives provided regarding the interpretation and application of the Legal Metrology Act in determining the classification of products as 'pre-packaged commodities'.