2023 (5) TMI 1426 - AT - Central Excise

Method of Valuation - Section 4 or 4A of CEA 1944 - goods i.e. AC/DC drives low voltage panels / switchgear and parts Air Circuit Breakers (ACB) Miniature Circuit Breakers (MCB) Moulded Case Circuit Breakers (MCCB) etc. packed in cartons weighing more than 25 kgs and cleared to industrial consumers through channel partners / distributors - HELD THAT - The said issue need not dwell in much as after considering the relevant notifications and case laws on the subject in the appellant s own case for Nelamangala Unit this Tribunal in 2022 (5) TMI 200 - CESTAT BANGALORE held that 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 . The impugned orders are set aside and appeals are allowed.

Summary

The issues presented and considered in the legal judgment are as follows:1. Whether goods packed in cartons weighing more than 25 kgs and cleared to industrial consumers through channel partners/distributors should be assessable under Section 4 or 4A of the Central Excise Act, 1944.The detailed analysis of the issues is as follows:The facts of the case involve the appellant being engaged in the manufacture of various goods falling under Chapter 85 of the Central Excise Tariff Act, 1985. The goods are imported in bulk in large cartons, which are then repacked and relabeled in the appellant's factory. The issue arises from the duty assessment on goods weighing more than 25 kgs sold through dealers and distributors, as opposed to directly to industrial consumers.The appellant argued that goods meant for industrial consumers, when cleared through channel partners, should not be subject to MRP-based assessment. They relied on a previous judgment in their own case and a decision of the Hon'ble Karnataka High Court to support their position.The Revenue supported the findings of the Commissioner of Central Excise.The Tribunal considered the relevant notifications, case laws, and the specific circumstances of the appellant's case. The core issue was whether goods sold through channel partners to industrial consumers should be assessed under Section 4 or 4A of the Central Excise Act, 1944.The Tribunal referred to its previous order in the appellant's own case for a different period, where it had held that goods weighing more than 25 kgs and intended for industrial use should be treated as such, regardless of whether they were sold directly or through channel partners. The Tribunal emphasized that the nature of the goods does not change based on the mode of sale, and the High Court's decision supported this interpretation.The Tribunal concluded that there was no reason to deviate from its previous judgment and set aside the impugned orders, allowing the appeals with consequential relief as per law.Significant holdings from the judgment include:- The nature of goods intended for industrial use does not change based on the mode of sale.- Goods weighing more than 25 kgs and meant for industrial use should be assessed as such, irrespective of sales through channel partners.- The Tribunal's decision in the appellant's previous case for a different period was upheld, providing consistency in the interpretation of the law.In conclusion, the Tribunal ruled in favor of the appellant, emphasizing that goods intended for industrial consumers should be assessed based on their nature and end-use, regardless of the sales channel. The judgment provides clarity on the assessment of goods under the Central Excise Act, 1944 in cases involving sales through channel partners to industrial consumers.