2014 (8) TMI 153 - AT - Central Excise

Clearance cement in bags without affixing MRP to contractors engaged in construction activity - Exemption under Sl. No. 1C of the Notification No. 4/2006-C.E. dated 1.3.2006 - mis-declaration of the category of consumers - demand of differential duty - Held that - it was appropriate for the Commissioner to consider the purchase orders and declaration filed by the appellant and record a finding and thereafter come to a conclusion. Besides, the appellant relied upon several decisions on the very same issue. Even though those decisions were not before the Commissioner, the same should be considered before a conclusion is arrived at. Even though this was not an issue in the show-cause notice and proposed demand of differential duty at Tariff rate, there is no finding as to what is the rate of duty and no quantification on this ground also. Besides, the appellant claims before us that they have deposited an amount of ₹ 42 lakhs towards differential duty during the cement bags were cleared after affixing MRP. Matter remanded back - Decided in favour of assessee.

Summary

Issues:
1. Mis-declaration of category of consumers for exemption under Notification No. 4/2006-C.E.
2. Assessment of Tariff rate for clearances made without affixing MRP on cement bags.

Analysis:

Issue 1: Mis-declaration of category of consumers
The appellant cleared cement in bags without affixing MRP to contractors engaged in construction activity, claiming exemption under Sl. No. 1C of Notification No. 4/2006-C.E. The Commissioner alleged mis-declaration of consumers' category, contending they were not industrial/institutional consumers as per SWM (PC) Rules. The appellant argued that consumers were indeed industrial/institutional, supported by filed declarations/purchase orders. The Tribunal found the Commissioner erred by not considering these documents and related decisions cited by the appellant. The matter was remanded for fresh adjudication, emphasizing the need to properly analyze all aspects.

Issue 2: Assessment of Tariff rate for clearances without MRP
The second issue raised whether clearances to individuals/employees without MRP on cement bags would attract Tariff rate, despite not being part of the show-cause notice. The Tribunal noted the absence of findings on the applicable duty rate and the quantification of differential duty. The appellant claimed to have paid Rs. 42 lakhs as differential duty when affixing MRP on subsequent clearances. The Tribunal highlighted the necessity to assess the correctness of the duty calculation in such scenarios and directed a comprehensive review of all related aspects. The impugned order was set aside, and the matter was remanded for a thorough reevaluation, ensuring the appellant's right to present their case.

In conclusion, the Tribunal emphasized the importance of considering all relevant evidence and legal precedents in reaching a decision. The judgment underscored the need for a meticulous assessment of issues related to consumer classification and duty calculation, ensuring a fair and comprehensive adjudication process.