9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (5) TMI 200 - AT - Central ExciseMethod of Valuation - Air Circuit Breakers - MCCB - Switch Fuse unit - classifiable under Chapter Heading 8536 2010, 8536 2020 and 8536 5090 meant for industrial consumers and weighing more than 25 kgs. are to be valued according to the transaction value under Section 4 of the Central Excise Act, 1944 or the MRP Value under Section 4A of the Central Excise Act, 1944? - Extended period of limitation - HELD THAT - In the instant case, it is found that it is not disputed by the either parties that the goods are excisable; sold in the package, the goods are specified vide Notification No.14/2008-CE (NT) dated 1.3.2008 as amended and N/N. 49/2008-CE (NT) dated 24.12.2008 to fall under Section 4A. However, the dispute appears to be regarding the definition of Industrial Consumer . Whereas the definition of Industrial Consumer at the relevant point of time meant industrial consumers who buy packaged commodities directly from the manufacturer for use by that industry. The dealer is not a individual consumer and the goods are routed through them to the industrial consumers. The department had no objection in case of very same goods cleared directly to the industrial consumers. Thus, there is an ambiguity in the treatment of the impugned goods by the department. It is the very same goods that are sold directly to the industrial consumers and also through channel partners. It is found that such a treatment by the department defies logic as the nature of the goods is not changed just by the way they are sold. The characteristics, the usage and the users are not changed. Invocation of longer period - HELD THAT - The appellant s contentions are acceptable and the department has not made out any case for invocation of extended period. The impugned goods, in packages having weight more than 25 kg are not chargeable to duty under Section 4A, only for the reason that they are sold through channel partners; differential duty demanded on this count is set aside - All other demands, if any, within normal period are confirmed - Penalty is set aside.
Issues Involved:
1. Applicability of Section 4A of the Central Excise Act, 1944 for goods meant for industrial consumers. 2. Classification of goods under Chapter Heading 8536. 3. Requirement of affixing MRP on packages weighing more than 25 kg. 4. Invocation of extended period under Section 11A of the Central Excise Act, 1944. 5. Imposition of penalty under Section 11AC of the Act. Detailed Analysis: 1. Applicability of Section 4A of the Central Excise Act, 1944 for Goods Meant for Industrial Consumers: The core issue was whether the goods (ACB, MCCB, and Switch Fuse units) meant for industrial consumers and weighing more than 25 kg should be valued under Section 4 or Section 4A of the Central Excise Act, 1944. The appellants argued that their products, intended solely for industrial use, are exempt from MRP declaration as per the Legal Metrology Rules. The Tribunal found that the goods, marked for industrial use and weighing over 25 kg, are indeed meant for industrial consumers, even if sold through channel partners. The Tribunal relied on the Karnataka High Court's ruling in the Ewac Alloys case, which held that routing goods through dealers does not change their industrial nature. 2. Classification of Goods under Chapter Heading 8536: The appellant's goods were classified under Chapter Heading 8536 of the Central Excise Tariff Act, 1985. The Tribunal did not dispute this classification, focusing instead on the valuation method and the applicability of Section 4A. 3. Requirement of Affixing MRP on Packages Weighing More Than 25 kg: The Tribunal noted that the Legal Metrology (Packaged Commodities) Rules, 2011, specifically exempt packages weighing more than 25 kg from MRP declaration. The Tribunal held that the goods, clearly marked for industrial use and weighing more than 25 kg, do not require MRP labeling, even if sold through intermediaries. This interpretation was supported by the Karnataka High Court's decision in Ewac Alloys. 4. Invocation of Extended Period under Section 11A of the Central Excise Act, 1944: The Tribunal addressed the issue of the extended period for demand. The appellants argued that there was no suppression of facts and that the extended period could not be invoked, especially since a similar issue had been previously raised. The Tribunal agreed, citing the Supreme Court's decision in Nizam Sugars, which prohibits invoking the extended period for subsequent notices on the same issue. 5. Imposition of Penalty under Section 11AC of the Act: The Tribunal set aside the penalty imposed under Section 11AC, agreeing with the appellants that there was no intent to evade duty. The Tribunal found that the issue was one of interpretation and not of deliberate evasion. Conclusion: The Tribunal allowed the appeal partly, ruling that goods in packages weighing more than 25 kg are not subject to duty under Section 4A solely because they are sold through channel partners. The differential duty demand on this count was set aside. However, any other demands within the normal period were confirmed, and the penalty was set aside. The order was pronounced in the Open Court on 28/04/2022.
|
