2004 (10) TMI 154 - AT - Central Excise

Summary

Issues:
1. Application of Section 4A assessment on refrigerators sold to soft drink manufacturers.
2. Interpretation of provisions under the Standards of Weights & Measures Act.
3. Assessment of duty under Section 4A versus Section 4.

Analysis:

Issue 1: Application of Section 4A assessment on refrigerators sold to soft drink manufacturers
The case involved the sale of refrigerators to soft drink manufacturers, which were then provided to retail outlets on a rental basis. The Tribunal referred to a previous decision in the case of ITEL Industries where it was established that goods sold in bulk to an entity for further distribution without retail sale are not subject to Section 4A assessment. The Tribunal held that since there was no retail sale involved in the transactions with the soft drink manufacturers, the provisions of Section 4A did not apply in this case.

Issue 2: Interpretation of provisions under the Standards of Weights & Measures Act
The Tribunal addressed the argument raised by the CCE (Appeals) regarding the applicability of the Standards of Weights & Measures Act. It was noted that while the Act exempts goods specially packed for exclusive use in certain industries or services, the refrigerators in question were sold with a Maximum Retail Price (MRP) without any special packaging indicating such use. Rule 34(a) under the Act was deemed inapplicable in this scenario. The Tribunal emphasized that the appellants had complied with the statutory requirement of declaring an MRP on the refrigerators, which entitled them to the benefit of Section 4A assessment.

Issue 3: Assessment of duty under Section 4A versus Section 4
The Tribunal rejected the lower authority's reliance on the appellants' subsequent payment of duty under Section 4 as a basis for levying duty under Section 4. It was clarified that as per the law, duty should be assessed under Section 4A due to the statutory requirement of declaring an MRP on the refrigerators. The Tribunal concluded that the appellants had fulfilled this requirement and therefore should not be denied the benefit of Section 4A assessment. Consequently, the Tribunal set aside the previous order and allowed the appeal in favor of the appellants.