2008 (2) TMI 103 - AT - Central Excise

Packs containing about 100 Eclairs brand chocolates each weighing 5.5 gms cleared adopting cost construction method assessee pleaded that clairs chocolates cleared in packets were wholesale packages which was not intended for retail sale to the ultimate consumer, so sec 4A is not justified for assessment - individual toffees weighing 5.5 gms per piece as well as packs of 100 such pieces do not attract assessment under Section 4 A assessee s appeal allowed

Summary

Issues:
- Appeal against order demanding differential duty, interest, and penalty on the basis of MRP assessment for clearances of chocolates in wholesale packages.
- Interpretation of statutory provisions regarding wholesale packages and MRP-based assessment under the Weights and Measures Act and Packaged Commodities Rules.
- Comparison with previous Tribunal decisions on similar cases involving wholesale packages and MRP assessment.
- Consideration of whether the wholesale packages containing individual sweets were intended for retail sale and subject to MRP-based assessment.

Analysis:
1. The appeal was filed against an order demanding differential duty, interest, and penalty on the basis of MRP assessment for clearances of chocolates in wholesale packages. The appellant argued that the individual toffees packed in wholesale packages were not required to bear MRP as per the Weights and Measures Act and Packaged Commodities Rules. They contended that the wholesale packages containing 100 or more pieces fell under the definition of wholesale packages as per Rule 2(x) and were exempt from MRP requirements under Rule 34.

2. The appellant relied on the decision in Swan Sweets Pvt. Ltd. vs. CCE Rajkot, where it was held that wholesale packages containing chocolates for retail sale did not attract MRP-based assessment. They also referred to the decision in CCE Mumbai vs. Urison Cosmetics Ltd. regarding a similar commercial practice with hair dye. The appellant argued that the wholesale packages in question were not multi-piece packages intended for retail sale, as per Rule 2(j) of the Packaged Commodities Rules.

3. The JCDR cited the decision in Roys Industries Ltd. vs. CCE Hyderabad, where the Tribunal interpreted "multi-piece package" and considered whether packages containing several chocolates should be assessed under Section 4 or 4A of the Act. The Tribunal in that case concluded that retail sale could include purchases by individuals or groups, and the intention for retail sale depended on the distribution and sale organization.

4. Upon careful consideration of the case records and submissions, the Tribunal found that the facts of the instant case were similar to the Swan Sweets Pvt. Ltd. decision. The Tribunal reiterated that individual toffees and packs of such toffees did not attract assessment under Section 4A of the Act if they were not intended for retail sale. Following the precedent set in the previous decision, the Tribunal allowed the appeal filed by the appellant.

5. The Tribunal pronounced the operative part of the order on 22.02.08, ruling in favor of the appellant based on the interpretation of statutory provisions, previous Tribunal decisions, and the intention behind the distribution and sale of the wholesale packages containing individual sweets.