1999 (3) TMI 168 - AT - Central Excise

Summary

Issues Involved:
The issue involved in this case is whether duty is payable on excess quantity filled in retail containers and if penalty is imposable for contravention of rules.

Manufacture of Prickly Heat Powder:
The appellant was engaged in the manufacture of prickly heat powder, which was being packed and cleared for retail sale in containers stated to contain 200 gms. However, investigations revealed that each container held on average 205 gms, leading to a demand for duty on the excess quantity allegedly clandestinely removed.

Contention and Decision:
The appellant argued that the excess quantity was to ensure compliance with the Standards of Weights and Measures Act, 1979, and that the extended period for demand was not applicable as the information had been communicated to the department earlier. The Commissioner did not accept this, stating that the goods had been cleared without payment of duty, confirming the demand and imposing a penalty.

Tribunal's Analysis:
The Tribunal considered a similar case involving ultramarine blue where duty was demanded for excess quantity in retail packs. It was held that if duty was ad valorem, the exact quantity declared on the packs would not affect the duty payable. The Departmental Representative argued that additional consideration for the excess quantity was not proven, but the Tribunal found no evidence of such consideration.

Conclusion:
The Tribunal found no evidence of additional consideration for the excess quantity, as retail prices were marked on the containers and no extra payment was made by customers. It was held that the marginal increase in product contents did not prove clandestine removal or duty evasion. Therefore, following the precedent, the Tribunal ruled that duty was not payable, and no penalty was justified for technical and procedural contraventions.

Judgment:
The appeal was allowed, and the impugned order demanding duty and imposing a penalty was set aside.