2020 (3) TMI 655 - AT - Central Excise

Valuation and Refund - insecticides/pesticides - Revenue is of the view that the appellants are manufacturing insecticides/pesticides and packing them in the pouch of 10gms or less than 10gms, therefore, they are not required to pay duty - Section 4(A) of the Central Excise Act, 1944 - HELD THAT - It is a fact on record that the appellants are packing the pouches of pesticides/insecticides of less than 10gms and the same were packed into a bigger box and affixing MRP thereon. Therefore, in terms of the provisions Section 2(p) of the Standards of Weights Measures Act, 1976, the appellants are required to affix MRP thereon wherein it has been specified that the multiple pieces are packed in a bigger box, the manufacturer is required to affix MRP. The appellants have rightly paid duty under Section 4(A) of the Central Excise Act, 1944. Consequently, the appellants have correctly taken the refunds under Notification No. 56/2002-CE dated 14.11.2002 on duty paid in cash. In these circumstances, the proceedings against the appellants are not sustainable. Appeal allowed - decided in favor of appellant.

Summary

Issues:
Interpretation of Section 4(A) of the Central Excise Act, 1944 for duty payment on insecticides/pesticides packed in pouches less than 10gms, Affixing of Maximum Retail Price (MRP) on packaging, Recovery of excess duty refund under Notification No. 56/2002-CE dated 14.11.2002.

Analysis:

Interpretation of Section 4(A) of the Central Excise Act, 1944:
The appellants were engaged in manufacturing insecticides/pesticides packed in pouches of 10gms or less, affixing MRP on the packaging and paying duty under Section 4(A) of the Act. Revenue contended that duty should be paid under Section 4 of the Act as per Rule 34 of the Standards of Weights & Measures Rules, 1977. Show cause notices were issued, alleging excess refund of duty under Notification No. 56/2002-CE dated 14.11.2002. The Tribunal noted that the appellants correctly paid duty under Section 4(A) as per the Standards of Weights & Measures Act, 1976, which mandates affixing MRP on packaging when multiple pieces are packed in a bigger box. The Tribunal upheld the appellants' payment method and duty refund under the notification, deeming the proceedings against them as unsustainable.

Affixing of Maximum Retail Price (MRP) on packaging:
The Tribunal emphasized that the appellants were compliant with the provisions of Section 2(p) of the Standards of Weights & Measures Act, 1976, by affixing MRP on the packaging of insecticides/pesticides packed in pouches less than 10gms and further packed in a bigger box. This adherence to the legal requirement supported the Tribunal's decision in favor of the appellants, confirming the correctness of their duty payment and refund claims.

Recovery of excess duty refund under Notification No. 56/2002-CE dated 14.11.2002:
The Tribunal addressed the issue of the Revenue's claim for the recovery of excess duty refund obtained by the appellants under Notification No. 56/2002-CE dated 14.11.2002. By ruling in favor of the appellants regarding the duty payment method and refund eligibility, the Tribunal set aside the impugned orders and allowed the appeals with consequential relief, if any. This decision invalidated the demand for the recovery of the alleged excess refund, providing a favorable outcome for the appellants.

This comprehensive analysis of the judgment highlights the key legal issues, the Tribunal's reasoning, and the final decision in favor of the appellants based on the interpretation of relevant provisions and legal compliance in the matter of duty payment and refund under the Central Excise Act, 1944.