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TMI Blog2014 (9) TMI 661X X X X Extracts X X X X X X X X Extracts X X X X ..... s and provisions of Section 4A are not applicable in unit containers as per Rule 2A(ii) Explanation. Plain reading of the explanation to Rule 2A of the said rules clearly shows that if goods are sold to institutional/industrial consumers directly by the manufacturer, the said rule will not apply. In Para 70 of the impugned order, the learned Commissioner has recorded the findings that since noticee’s product tem adhesive is not directly sold to the retailer, but these are sold through dealers and distributors that too some distributors have their own tyre retreading nature. When these facts were on record, it is proved that the applicant has not sold these goods directly to the industrial/institutional consumers, therefore, the applicant cannot avail exemption from affixing MRP on their finished product. To all other institutional or industrial consumers of prepared commodity sold as retail package that chapter would apply. Explanation of industrial or institutional consumer in Rule 2A must also be read only to the provisions to Rule 2(p) for the purpose of Chapter 2. Therefore, the only purchaser of packaged commodities who are institutional or industrial consumer and buy t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of provisions of Section 4A, which allows clearance on payment of duty based upon the MRP endorsed on the said packages after allowing the abatement. Admittedly the appellants product is classifiable under Heading 3506 which relates to prepared glues and other prepared adhesives. It is also further seen that the appellant is endorsing the said packages with the MRP. It is also not disputed that the said Chapter 3506 is notified under Section 4A. 4. As per Section 4A, the Central Government may by notification specify any goods, in relation to which it is required, under the provisions of Standards of Weights and Measure Act, 1976 or the Rules made thereunder or under any other law for the time being in force to declare on the packages thereof the retail sale price of such goods. Said Section 4A was the subject matter of appeal before Hon ble Supreme Court in the case of Jayanti Food Processing (P) Ltd. v. CCE, Rajasthan [2007 (215) E.L.T. 327 (S.C.)]. The Hon ble Court held that the following would be factors to include the goods in Section 4A(1) and (2) of the Act : (i) The goods should be excisable goods; (ii) They should be such as are sold in the package; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esives through network of distributors, dealers and retails and the goods are not being bought by their customers directly from the appellants. As such, the reasoning of the adjudicating authority that the packages from 5 Kg to 25 Kgs. have to be considered as industrial or institutional packages is not in accordance with the definition appearing in Rule 2A. As such, at this prima facie stage, it has to be held that the appellant s goods is not covered by the exclusion clause of 2A and they are required to endorse the packages with the MRP on the same. 7. The adjudicating authority has referred to Rule 13 of the Packaged Commodities Rules, which we have gone through and find that same are not applicable. The said rule merely relates to the units of Weights and Measures or numbers in respect of 1 Kilogram, 1 metre, one square metre, or 1 cubic decimetre or 1 litre. Rule 13 of the said Rules lays down the procedure to declare the weight and the packed commodities when the same is more than 1 Kg or 1 lt. 8. In view of our foregoing discussion, we find that admittedly the appellant s goods falling under 35.06 are notified under Section 4A and are required to be endorsed with the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... where specified or included; products suitable for use as glues or adhesives, put up for retail sale as glues or adhesives, not exceeding a net weight of 1 kg. 16. It comes out that stress is on retail packs not exceeding weight of one kg. Entry at S. No. 43 of notification No. 2/2006-C.E. (N.T.) and its subsequent notification reads as : Prepared glues and other prepared adhesives, not elsewhere specified or included. 17. If both above are read together, it clearly comes out that MRP is only available if their product is put up in unit containers of 1 kg for retail sale. 18. Other issue regarding exemption for making of MRP in terms of Rule 2A of the Packaged Commodities Rules where it is specifically pointed out that : Applicability of the Chapter. - The provisions of this Chapter shall not apply to, (a) Packages of commodities containing quantity of more than 25 kgs or 25 ltrs excluding Cement Fertilizers sold in bags upto 50 kgs; and (b) Packaged commodities meant for industrial consumers or institutional consumers. Explanation - For the purpose of this Rule, - (a) Institutional consumer-means those consumers who buys packaged commodit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... kable and demand is time-barred. In their defense, the notice submitted that they have submitted I that all the statutory returns to the department and also maintained all the records required to be maintained under the provisions of Central Excise Act or Rules made thereunder. The copies of ER-1 returns clearly mention that the goods of the noticee are assessed under Section 4A and MRP abatement benefit has been availed under the abatement notification. Also, from a bare perusal of invoices also, it is clear that the goods of the noticee are assessable as per Section 4A. On perusal of ER-1, I observe that the noticee have made a consolidated quantity of TEM adhesive in litres and it is not possible to ascertain the quantity unitwise packing. The notification no. 02/2006-CE, dated 01-03-2006 has also not been reflected on ER-1. Thus, the facts have been suppressed by the noticee. Accordingly, I find that the extended period has rightly been invoked. Thus suppression of relevant information having revenue implication attracts extended period of demand. 22. In view of above, the extended period of limitation is invocable. I am not in agreement with the findings of learned Memb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be restricted to adhesives only packed in one litre and assessment under section 4 is to be done in respect of other industrial use and service industry. Consequently pre-deposit of 50% of duty is to be ordered? 25. The issue in this matter is whether the tem-adhesive cleared by the applicant packages containing 5 to 25 Itrs. is required to be chargeable to duty as per Section 4A of the said Act? 26. The contention of the applicant is that the product in question falls under Chapter 3506 of the Central Excise Tariff. It is submitted that the classification not in dispute that the product i.e. prepaid glue and pre-paid adhesives other than elsewhere specified or included; product suitable for use as glue or adhesive, put up for retail sale as glue or adhesive, not exceeding weight by 1 kgs. falls under Customs tariff heading No. 3506 91 90. It is his contention that the Entry has two limbs (a) Prepared glues and other prepared adhesives, not elsewhere specified or included; (b) product suitable for use as glues or adhesives, put up for retail sale as glues or adhesives, not exceeding a net weight of 1 kg. and the classification done by adjudicating authority is 3506 91.90 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eing used in house but no evidence has been placed on record. Therefore, looking into the nature of the product, it is clear that tem adhesive is consumed by Industrial consumers and provisions of Section 4A are not applicable in unit containers as per Rule 2A(ii) Explanation. 30. Provisions of Rule 2A of Standards of Weights Measures (P.C.) Rules, 1977 are reproduced as under : Rule 2A. Applicability of the Chapter. - The provisions of this Chapter shall not apply to - (a) Packages of commodities containing quantity of more than 25 kgs. or 25 litres excluding cement and fertilizer sold in bags up to 50 kgs; and (b) Packaged commodities meant for industrial consumers or industrial consumers. Explanation. - For the purpose of this rule, - (a) Institutional consumer. - Means those consumers who buy packaged commodities directly from the manufacturers/packers for service industry like transportation including airways, railways, hotel or any other similar service industry. (c) Industrial Consumer. - Means those consumers who buy packaged commodities directly from the manufacturers/packers for using the product in their industry fo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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