2024 (5) TMI 1127 - AT - Central Excise

Recovery of Excise Duty u/s 4A or u/s 4A of Central Excise Act, 1944 - package is more than 10 gm - Applicability of Standards of Weights and Measures Rules, 1997 - invocation of Extended period of Limitation - HELD THAT - N/N. 49/2008-CE (NT) dated 24.12.2008 mentions the applicability of Section 4A only to pouches/ packages whose net weight is more than 10 gm; it is not the Department s case that chewing tobacco sold by the appellant in the impugned pouches is more than 10 gm. It is found that notwithstanding the fact that MRP is printed on the pouch, provisions of Section 4A can be made applicable only when the weight of the net contents is more than 10 gm, as required under Standards of Weights and Measures Rules, 1997. Under these circumstances, it is found that the gross weight of the pouch or the net weight of the pouch including the freely supplied lime tube cannot be the criteria for adopting valuation of Section 4A. Invocation of Extended period of Limitation - HELD THAT - It is found that the appellant is a longstanding assessee; has been filing all the declarations and tax returns; under the circumstances, the extended period cannot be invoked. Therefore, there is merit in the appeal filed by M/s Jaimal Singh Kundan Lal Khatri(Appeal No. E/57/2012) on limitation also. Appeal disposed off.

Summary

Issues involved: Determination of duty payment u/s 4 or u/s 4A of Central Excise Act, 1944 for manufacturing and clearing pouches containing chewing tobacco, applicability of Standards of Weights and Measures Rules, 1997, invocation of extended period for assessment, abatement of appeal due to demise of appellant, and change of name and address of the Respondent.

Summary:
The case involved M/s Jaimal Singh Kundan Lal Khatri, registered manufacturers of chewing tobacco under the Brand "Langra," who were found manufacturing and clearing pouches containing chewing tobacco of 5 gm and 10 gm with printed MRP, paying duty u/s 4 instead of u/s 4A. A Show-Cause Notice proposing duty recovery and penalties was issued, leading to confiscation of goods and imposition of penalties. On appeal, the Commissioner confirmed duty and penalties but vacated the seizure, leading to further appeals.

Duty Payment u/s 4 or u/s 4A:
The Department sought to confirm duty payment u/s 4A based on the weight of the pouches, while the appellants argued that the net content of tobacco was less than 10 gm, thus not taxable under Section 4A. The Tribunal found that Section 4A applies only to pouches with a net weight exceeding 10 gm, not the case here. The weight of the lime tube included in the pouch was not to be considered for duty calculation under Section 4A.

Invocation of Extended Period:
The appellants contended that the extended period for assessment cannot be invoked due to their longstanding compliance history, which the Tribunal agreed with, ruling in favor of the appellants on the limitation issue.

Abatement of Appeal:
In the appeal related to the partner, Shri Harbans Lal Khatri, it was noted that he had passed away, leading to the abatement of the appeal under Section 22 of CESTAT Procedure Rules, 1982.

Change of Name and Address of Respondent:
A miscellaneous application was filed for changing the name and address of the Respondent, which was allowed by the Tribunal based on the notification changing the jurisdiction to CGST Faridabad Commissionerate.

In conclusion, Appeal No. E/57/2012 was allowed, Appeal No. E/56/2012 was held to have been abated, and the change of name and address of the Respondent was approved.