2004 (7) TMI 171 - AT - Central Excise

Valuation (Central Excise) - Demand - Limitation - Powder Hair Dye, cleared by the appellant in multi-piece packaging - Duty to be assessed u/s 4 or 4A of the Central Excise Act based on the declaration of Maximum Retail Price (MRP) on the package? - HELD THAT - From the circulars issued time to time it is apparent that the view has consistent been that if a manufacturer is not legally required to be declare the MRP on a package, then the provisions of Section 4A of the Central Excise Act will not be applicable for Of assessment of duty on such packages. Rule 34(b) of the Rules under Standards of Weights and Measures Act is very clear and unambiguous. The sub-rule (b) thereof, provides that the provisions of the Packaged Commodities Rules will not be applicable where the net weight or measure of the commodity contained therein, is 20 gm or 20 ml or less. The second proviso thereto relates to declarations in respect of Maximum Retail Price, net quantity. When these two proviso of Rule 34(b) are read together it is clear that the declaration in respect of Maximum Retail Price and the net quantity is not required to be made if the net content of the packages is less than 10 gms or 10 ml. Therefore, the Appellants' multi-piece packages having only 9 gms in the multi pack under consideration is clearly exempt from the requirement of declaration of MRP under Standards of Weights and Measures Act. In other words, it is not legally obligatory declare MRP of such packages. The ld. Advocate has brought on record that Commissioners (Adjudication) and two Commissioners (Appeals) have concurrently held that the Appellants multi-piece packing (of 3 sachets of 3 gms each) of powder hair dye is entitled to exemption under Rule 34(b) in the case of these very appellant for earlier periods. Departments appeal before this Tribunal, E/253/2003-Mumbai dated 10-5-2004, was dismissed. Therefore, we find no reason to arrive at a contrary decision. It is therefore held that the package herein is not liable for assessment to duty under Section 4A of the Central Excise Act, 1944. In view of the fact that duty has been paid under Section 4 and no duty further were required to be paid under Section 4A of the Central Excise Act. We do not find any reason to call for the demands and other consequences. Order impugned are therefore required to be set aside. When it is found that the above issue was raised from time to time and the issues were not clear to the officers and the assessee and Board had also changed the views, we find the plea of limitation raised by ld. Advocate is to be upheld. Thus, the orders are set aside. The appeal is allowed.

Summary

Issues involved:
The issue involved in this case is whether the product, Powder Hair Dye, cleared by the appellant in multi-piece packaging, is required to be assessed under Section 4 or Section 4A of the Central Excise Act based on the declaration of Maximum Retail Price (MRP) on the package.

Comprehensive Details of the Judgment:

Issue 1: Assessment under Section 4 or Section 4A
The appellant, a manufacturer of Powder Hair Dye, argued that their product, packed in 3 gm sachets with 3 sachets in a carton totaling 9 gms, does not require an MRP declaration as the net quantity is less than 10 gms. The department contended that the product falls under Section 4A due to the MRP requirement. Various circulars and instructions were examined, indicating that Section 4A applies only when MRP is statutorily required. The appellant relied on previous decisions and circulars to support their claim for exemption under Rule 34(b) of the Standards of Weights and Measures Act.

Issue 2: Interpretation of Rule 34(b)
The circulars clarified that multi-piece packages with individual pieces less than 10 gms or 10 ml, even if the total exceeds 10 gms or 10 ml, are exempt from MRP declaration under Rule 34(b). The Law Ministry opined that the exemption under Rule 34(b) does not apply to multi-piece packages. However, the appellant argued that the circular's interpretation should be limited to specific cases and not all multi-piece packages, especially those with less than 10 gms or 10 ml.

Issue 3: Exemption under Rule 34(b)
The Tribunal found that the appellant's multi-piece packaging of Powder Hair Dye, containing 3 sachets of 3 gms each, qualifies for exemption under Rule 34(b) as it falls below the 10 gms threshold. Previous decisions and concurrent rulings by Commissioners supported the appellant's claim for exemption, leading to the conclusion that the product is not liable for assessment under Section 4A.

Conclusion:
The Tribunal allowed the appeal, setting aside the orders requiring duty payment under Section 4A. Due to the unclear interpretation of the issues by officers and changing views of the Board, the plea of limitation raised by the appellant was upheld. The appellant's product was deemed exempt from duty under Section 4A based on the packaging and MRP declaration criteria.

This judgment highlights the importance of statutory requirements, circular interpretations, and exemptions under relevant rules in determining the assessment of excise duty on packaged commodities.