2016 (1) TMI 266 - AT - Central Excise

Valuation - Section 4 or 4A - respondents are engaged in the manufacture of branded chewing tobacco liable to central excise duty - Held that - The wholesale packages are defined under Rule 2(x) of Standards of Weight and Measures (Packaged Commodities) Rules, 1977. The Tribunal further examined the definition for multiple piece package under Rule 2(j) and retail package under Rule 2(p) of the said rules. Since packages under which the products were sold by the respondent clearly fall within the exemption provided under Rule 34(1) (b) of the said rules, the Tribunal in the said decision held that section 4A has no application. We find that the facts of the present are similar to the one discussed above. Accordingly, we find that there is no reason to interfere with the impugned order. - Decided against Revenue.

Summary

Issues: Valuation of products under section 4A of Central Excise Act, 1944

Analysis:
1. Facts and Background: The case involves a dispute regarding the valuation of branded chewing tobacco manufactured by the respondents, packed in 6 gms and 3 gms pouches and then into packages for clearance. The original authority imposed duty under section 4A of the Central Excise Act, 1944, considering the packages as multiple unit retail packages. On appeal, the Commissioner (Appeals) set aside the order based on precedents.

2. Revenue's Contention: The Revenue argued that the small pouches were not sold by weight or measure, citing a decision of the Hon'ble Madras High Court. They contended that the exemption from declaring MRP on small pouches was not available to the respondents under the Standards of Weight and Measures Rules, thus requiring valuation under section 4A.

3. Appellant's Defense: The appellant argued that the pouches were intended for retail sale, and the Revenue failed to prove that the multiple pouch packages were sold to retail customers. They highlighted the overruling of the Madras High Court decision by the Supreme Court and relied on tribunal decisions supporting their position, emphasizing that section 4A did not apply.

4. Tribunal's Decision: The Tribunal examined the definitions of wholesale packages, multiple piece packages, and retail packages under the Standards of Weight and Measures Rules. Citing previous decisions upheld by the Supreme Court, the Tribunal found that the products fell within an exemption under Rule 34(1)(b) of the rules, making section 4A inapplicable. The Tribunal dismissed the Revenue's appeal, upholding the Commissioner (Appeals) decision based on precedent and the specific facts of the case.

This detailed analysis of the judgment clarifies the issues, arguments presented by both parties, and the Tribunal's reasoning leading to the dismissal of the Revenue's appeal.