2006 (8) TMI 58 - AT - Central Excise

Valuation(Central Excise)-Branded Chewing tobbaco packed in 5gms and 9gms pouches which is less than Stansard Weight 10gms - Non-marking of MRP on pakages, not violation of provisions

Summary

Issues:
1. Whether duty on goods was payable under Section 4A of the Central Excise Act, 1944 based on Maximum Retail Price (MRP).
2. Applicability of Standards of Weights & Measures Act, 1976 and Standards of Weights & Measures (Packaged Commodities) Rules, 1977.
3. Interpretation of Rule 34(b) of the 1977 Rules regarding marking prices on packages.
4. Classification of polythene bags containing unit pouches as wholesale packages.
5. Compliance with legal metrology requirements and Board's Circular.
6. Relevance of decisions by Larger Benches in similar cases.

Detailed Analysis:
1. The appellant, engaged in manufacturing branded chewing tobacco, contested duty payment based on MRP under Section 4A of the Central Excise Act, 1944. The Commissioner levied penalties, arguing duty was payable on MRP basis. The Tribunal analyzed provisions of the Act, finding duty calculation based on actual price charged from wholesale buyers during the period in question was appropriate.

2. The Tribunal considered the absence of MRP declaration requirement under the Standards of Weights & Measures Act, 1976 and the 1977 Rules during the relevant period. Duty calculation was based on actual price due to this absence of MRP provision.

3. Rule 34(b) of the 1977 Rules exempts marking prices on packages containing commodities of 20 gms or less. The Tribunal determined that since the unit pouches were 5 or 9 gms, falling below the threshold, MRP marking was not mandatory on retail packages.

4. The polythene bags containing unit pouches were classified as wholesale packages. The Tribunal clarified that these packages did not violate the 1977 Rules regarding MRP marking, as they were intended for wholesale distribution, not retail sale.

5. The appellant obtained a certificate from the Controller, Legal Metrology confirming compliance with legal metrology requirements as per the Board's Circular. The Tribunal upheld the appellant's position, emphasizing the importance of following the clarification provided by the appropriate authority.

6. The Tribunal referenced decisions by Larger Benches in similar cases, such as Swan Sweets Pvt. Ltd. v. CCE and CCE v. Urison, to support their findings. These decisions clarified the definitions of wholesale packages and multi-piece packages, aligning with the circumstances of the present case.

In conclusion, the Tribunal set aside the previous orders and allowed the appeal based on the detailed analysis of the issues involved and the legal interpretations provided.