2012 (7) TMI 387 - AT - Central Excise

Transaction value versus MRP bases valuation - Assessment u/s 4 or u/s 4A - appellant s packages containing 34 retail pouches of net quantity below 10 mg. each is a wholesale package and merit assessment under Section 4 of the Central Excise Act - no demand has been raised by the Department nor the respondent has sought to file any refund claim within limitation Held that - Department continues to assess the excise duty under Section 4A and the assessee has no intention to apply for refund for the past period. Thus, it is contended that it has become infractuous after coming into operation Chewing Tobacco & Unmanufactured Tobacco Packing Machines ( Capacity Determination and Collection of Duties) Rules, 2010 framed under Section 3A of the Central Excise Act, 1944 - since the respondent has given an undertaking that he will not file any refund claim in respect of the past period, the appeal has become infractuous - appeal is dismissed as infractuous

Summary

Issues:
Interpretation of relevant provisions of law for assessing excisable goods under Section 4 of the Central Excise Act, 1944 based on packaging quantity below 10 mg. each.
Applicability of Rule 34(b) of the Standards of Weights and Measures (Packaged Commodities) Rules, 1977 in determining the assessment basis.
Effect of Notification No.13/2002-CE(NT) dated 1.3.2002 bringing goods under Section 4A of the Central Excise Act, 1944.
Claim for refund and assessment of excise duty under Section 4A post introduction of Chewing Tobacco & Unmanufactured Tobacco Packing Machines Rules, 2010.

Analysis:

The judgment by the Appellate Tribunal CESTAT, New Delhi involved the interpretation of the Central Excise Act, 1944 regarding the assessment of excisable goods contained in packages with a net quantity below 10 mg. Each. The Commissioner (Appeals) had previously determined that such packages, consisting of 34 retail pouches, qualified as wholesale packages and should be assessed under Section 4 of the Act. This decision was challenged in the appeal.

The appeal stemmed from a communication by the Superintendent Central Excise Range to the respondent, addressing the assessment of khaini branded chewing tobacco under Section 4A of the Central Excise Act, 1944 based on transaction value rather than MRP. The Superintendent highlighted the application of Rule 34(b) of the Standards of Weights and Measures (Packaged Commodities) Rules, 1977 and a relevant circular, emphasizing that the assessment basis depends on whether goods are sold by weight or measure, not by numbers.

The respondent's counsel argued that no demand was raised by the Department following the orders, and no refund claim was filed within the limitation period. It was asserted that the Department continued to assess excise duty under Section 4A, and the respondent had no intention to seek a refund for the past period. The counsel contended that the matter became irrelevant with the implementation of the Chewing Tobacco & Unmanufactured Tobacco Packing Machines Rules, 2010.

The Department's representative acknowledged that the respondent committed not to claim a refund for the past period, rendering the appeal moot. Consequently, the Tribunal dismissed the appeal as infructuous, clarifying that the respondent could not claim any refund regarding the disputed matter for the past period. The decision was made in light of the facts presented, and the appeal was disposed of accordingly.