2024 (1) TMI 818 - AT - Central Excise

Exemption to cement supplied to industrial / institutional consumers in 50 kg. bags - eligibility for Sl.No.1C of Notification No.4/2006-CE dt. 1.3.2006 - denial of exemption on the ground that appellant had cleared the cement in 50 kg. bags without printing Retail Sale Price on the bags as required. Whether Chapter II of SWM (PC) Rules, 1977 / PC Rules of 2011 require affixation of MRP / RSP on cement bags of 50 kgs. when cleared to industrial / institutional consumes? HELD THAT - As per the decision of the Hon ble Supreme Court in the case of COMMISSIONER OF CENTRAL EXCISE VERSUS M/S. MADRAS CEMENTS LTD. 2019 (11) TMI 1784 - SC ORDER a batch of cases on the same issue was decided by upholding the decisions of the Tribunal. The Tribunal held that R.S.P is not required to be printed on cement cleared in 50 kgs. bags to industrial / institutional consumers and is covered under Sl.No.1C of Notification No.4/2006-CE dated 1.3.2006 as amended. The Tribunal in the case of GRASIM INDUSTRIES LTD. (UNIT-I) VERSUS COMMISSIONER OF C. EX., TRICHY 2008 (10) TMI 462 - CESTAT, CHENNAI has discussed in detail the issue as to whether R.S.P has to be affixed on cement bags of 50 kgs and held that We have found favour with the assessee s case in view of the clarification issued by the CBEC, which is to the effect that no RSP requires to be printed on the goods sold to industrial/institutional consumers as defined under the rules framed under the Standards of Weights and Measures Act and that such goods would be covered under Sl. No. 1B or 1C of Notification No. 4/2006-C.E. by virtue of the Second Proviso to the Explanation to Sl. No. 1C of the Notification as amended. Thus, the allegation in the SCN as to whether the appellant has cleared cement to industrial / institutional consumers is too vague to be the basis for confirmation of demand. Further, adjudication after such lapse of time alleging that the appellant has not furnished evidences to show that the clearances of such 50 kg. bags have been made only to industrial / institutional consumers, is not justified. The demand cannot sustain and requires to be set aside - Appeal allowed.

Summary

Issues Involved:
1. Whether Chapter II of SWM (PC) Rules, 1977 / PC Rules of 2011 require affixation of MRP / RSP on cement bags of 50 kgs. when cleared to industrial / institutional consumers.
2. Whether the exemption from duty at Sl.No.1C of Notification 4/2006 as amended is available for the goods cleared by the appellant.

Summary:

Issue 1: Affixation of MRP / RSP
The department contended that the appellant must affix Retail Sale Price (RSP) on 50 kg cement bags as per Rule 2A of the SWM (PC) Rules, 1977, and thus, they are not eligible for exemption under Sl.No.1C of Notification No.4/2006. The appellant argued that they cleared cement to industrial/institutional consumers, which does not require RSP as per the third proviso to Explanation (2) appended to Sl.No.1C of Notification No.4/2007-CE dated 1.3.2007. The Tribunal referred to the Hon'ble Supreme Court's decision in Commissioner Vs Madras Cements Ltd. - 2020 (371) ELT A42 (SC), which upheld that RSP is not required on cement bags of 50 kgs cleared to industrial/institutional consumers, making them eligible for the exemption under Sl.No.1C of Notification No.4/2006-CE.

Issue 2: Eligibility for Exemption
The adjudicating authority initially confirmed the demand, stating the appellant failed to prove that the clearances were to industrial/institutional consumers. However, the show cause notices (SCNs) admitted that the cement was cleared to industrial/institutional consumers but argued that both conditions under Rule 2A must be satisfied cumulatively. The Tribunal found the SCNs vague, lacking specific evidence or instances of retail sales. The prolonged delay in adjudication (almost 15 years) and the failure to notify the appellant about the SCNs being placed in the call book were also noted. The Tribunal held that the appellant's clearances to industrial/institutional consumers were eligible for the concessional rate under Sl.No.1C of Notification No.4/2006-CE, as supported by various precedents and the Hon'ble Supreme Court's decision.

Conclusion:
The Tribunal set aside the demand, stating the allegations in the SCNs were too vague and the delay in adjudication was unjustified. The appeal was allowed with consequential relief.