2009 (9) TMI 492 - AT - Central Excise

Valuation-MRP valuation- Chewing tobacco in 5 gms in 9 gms pouches cleared in bulk packs. Impugned order holding that goods sold by weight only and net weight being less than 10 gms, not covered under Standards of Weights and Measurements (Packaged Commodity) Rules, 1977.

Summary

Issues:
1. Whether chewing tobacco contained in 5 gms and 9 gms pouches sold in bulk packs attracts duty under Section 4A of Central Excise Act, 1944.

Analysis:

1. The Revenue contended that irrespective of the contents being 5 gms or 9 gms, chewing tobacco in bulk packs should attract duty under Section 4A of the Central Excise Act, 1944. However, the learned Commissioner (Appeals) ruled in favor of the assessee, stating that the 5 gms and 9 gms pouches of chewing tobacco are exempt from the purview of Standard Weights and Measures, 1977. The Commissioner emphasized that the product is sold by weight, meeting the conditions of Rule 34(b) of SWM Rules, and thus, exempt from affixing MRP and Section 4A of the Act.

2. The Commissioner clarified that commodities weighing 10 gms or less, if sold by weight or measure, are exempt from the Weights and Measures Act, 1976. The container's size is deemed irrelevant when the contents are below or equal to 10 gms. The Commissioner's decision was guided by legal provisions and authorities, showing a clear understanding of the legal position, as highlighted in the order.

3. The learned SDR argued that goods cleared under the Weights and Measures Law should be subject to Section 4A of the Central Excise Act, 1944, citing a decision of the Hon'ble High Court of Madras. However, after examining the facts presented by the Commissioner (Appeals) and considering the individual weights of the commodities in bulk packs, the Tribunal agreed with the Commissioner's findings. The Tribunal found that the valuation of goods in this case should be governed by Section 4 of the Central Excise Act, 1944, in line with the legal principles laid down by the Apex Court.

4. The Tribunal dismissed the Revenue's appeal, upholding the Commissioner (Appeals) decision, as the factual matrix, rules, and legal precedents supported the conclusion that the chewing tobacco in 5 gms and 9 gms pouches sold in bulk packs is not subject to duty under Section 4A of the Central Excise Act, 1944. The judgment was based on a thorough analysis of the legal provisions and factual evidence presented before the Tribunal.