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TMI Blog2014 (8) TMI 658X X X X Extracts X X X X X X X X Extracts X X X X ..... duty and period involved is extracted below:- S.No. Show Cause Notice No. Date Period Amount of duty 1 IV(HQ)DCN/SPL(FT)RTK/2004/88 4.2.04 01.01.99 -31.5.03 77,65,484 2 IV(HQ)DCN/SPL(WT)RTK/2004 4.2.04 01.01.99 -31.5.03 36,13,340 3 IV(HQ)DCN/SPL/117/Rohtak/04/470 21.6.04 01.06.03-31.03.04 15,71,870 4 IV(HQ)DCN/SPL/116/Rohtak/04/466 21.6.04 01.06.03-31.03.04 16,27,971 5 IV(69)4/SPL(FT)ACR/5/2005/2877 21.4.05 01.04.04-31.12.04 4,34,611 6 IV(69)4/SPL(FT)ACR/5/2005/2877 21.04.05 01.04.04-31.12.04 1,73,234 2. Main allegation in the show cause notice in respect of appellant was that it cleared the ceramic tiles to different bulk buyers viz. builders, contractual, industrial buyers, hotel, schools, etc. Department has alleged that instead of assessing that under section 4A of the Central Excise Act, 1944 on contracted price under section 4 thereof. But appellant's defence was that once they have declared retail sale p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as under: It is therefore, clarifies that, in respect of all goods (whether notified under Section 4A or not) which are not statutorily required to print /declare the retails price on the packages under the provisions of SOW & M Act, 1976, or the rules there under or any other law for the time being in force, valuation will be done under Section 4 of the Act ibid. The circular further clarified that 'there could be instance where the same notified commodity would be partly assessed on the basis of MRP u/s 4A and partly on the basis of normal price or transaction value u/s of the Act ibid 5. Appellant further defended their case on the ground that there is no bar in the central excise law that manufacturer cannot sell the goods in retail by themselves and the sale by them to direct users for their consumption. This can be very well regarded as sale in retail. So looking into this angle also, the dictum of retail sale concept as envisaged by the department stands completed. Hence goods sold to these category of buyers are covered by provisions of section 4A. 6. They also contended that for the purpose of valuation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -CE(NT) dated 2.6.1998 and Notification No. 52/2000-CE (NT) dated 16.11.2000. Appellant declared MRP of the product and abatement was availed. Invoices issued by the appellant shows the price as declared in the price declaration and proper duty was paid. They further contended that monthly return/ ER-1 returns were filed by the appellant clearly showing payment of duty under section 4A after claiming abatement. They also claimed benefit of cum-duty deduction on account of duty in terms of law laid down by Honble Supreme Court in the case of CCE vs. Maruti-2002 (141) ELT 3 (SC). Consequently, they contested imposition of penalty and interest did not arise at all on the ground that ceramic tiles were notified for valuation under section 4A and not for valuation under section 4. Appellant relied upon the following case law in support of their contention:- (i) Whirlpool of India Ltd. Vs. UOI-2001 (137) ELT 42 (P&H) (ii) Mona Electronics vs. CCE-2001 (135) ELT 1293 (iii) ITEL Industries Pvt.Ltd. vs. CCE-2004 (163) ELT 219. 9. On the other hand, learned DR reiterated the Order-in-Original passed by the Commissioner and referred to Para-6 of the circular No.625/16/2002-Cx dated 28.2. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rule 2(q) of Standard Weights & Measures (Packaged Commodities) Rules, 1977 being not sold, distributed or delivered through retail sale agencies or other instrumentalities for consumption by an individual or group of individuals or any other consumer. He therefore concluded that such clearances were not eligible for valuation under section 4A of the Act. Rule 2(q) of Standard Weights & Measures (Packaged Commodities) Rules, 1977 which defines retail sale as under:- retail sale is in relation to a commodity, means the sale, distribution or delivery of such commodity through retail sales agencies or other instrumentalities for consumption by an individual or a group of individuals or any other consumer. 14. Commissioner did not accept the plea of the appellant that there was no bar in the central excise law that manufacturer could not sell the goods in retail by themselves and the sale by them to direct users for their consumption could not be regarded as sale in retail. Meaning of retail price under Rule 2(q) was misplaced by appellant. 15. Regarding availment of abatement, the party has pleaded that no abatement has b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e also relied on the fact that the packets in question were marked as goods Not for retail sale. The appellants have also relied on the clarification issued by the Central Board of Excise & Customs under Circular No. 625/16/2002, dated 28-2-2002 wherein it was clarified that goods sold in bulk at contracted price are to be assessed under Section 4. During the hearing of the case, learned Counsel for the appellants has also relied on several decisions of the Tribunal - Bharti Systel Ltd. v C.C.E. [2002 (145) E.L.T. 626 (T) = 2002 (51) R.L.T. 649]. C.C.E. v. Trishul Research Lab. Pvt. Ltd. [2002 (144) E.L.T. 204], Goa Bottling Co. Ltd. v. C.C.E. [2001 (128) E.L.T. 81 (LB)] and H & R Johnson (India) Ltd. v. CBEC [2002 (144) E.L.T. 506 (Kar)]. 4.We have perused the records and considered the submissions made by both sides. We find merit in the submissions made on behalf of the appellant. Marking on the goods prominently stated that the goods were 'specially packed for builders'. Thus, the goods were intended for a particular industry and thus, remained excluded under Rule 34 of the packaged Commodities Rules. The Commissioner (Appeals) has reject ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce came to the notice. It is general practice in the trade that when the goods are meant for specific use for specific purpose, marking on the packages is done accordingly. But that was not done with the intention of getting the benefit of Rule 34 of CP Rules. Accordingly appellants are not entitled to the assessment of goods under section 4A of the Central Excise Act.
23. Valuation was done by appellant under section 4A with the sole intention to evade payment of duty as is revealed by the fact situation of the case. Suppressing of material facts was manifested resulting in invokation of extended period in terms of first proviso to section 11A of the Act. Once suppression was manifested, appellant was liable to the imposition of penalty and plea of time bar fails..
23. In view of above, the Commissioner has rightly arrived at the conclusion that assessment of goods supplied to bulk buyers should be done under section 4 and not under section 4A. Invokation of extended period of limitation and consequent imposition of penalty under section 11AC is justified. His order is upheld and appeal is rejected.
(pronounced in the open court on 08.08.2014) X X X X Extracts X X X X X X X X Extracts X X X X
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