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TMI Blog2014 (11) TMI 920X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeals is September 2011 to September 2013. There is no dispute on the fact that the impugned goods are covered under Section 4A and also listed in the Notification No.49/2008 as amended for availing the abatement. TNCSC carried out procurement of Mixies, Table Top Wet Grinders, Electric Table Fans and Electric Rice Cookers for free distribution to the women beneficiaries, who are holding family cards eligible for drawal of rice on behalf of Tamil Nadu Government. The TNCSC is an undertaking of the Government of Tamil Nadu similar to M/s.ELCOT. M/s.ELCOT had been entrusted by Govt. of Tamil Nadu for procurement of colour T.V sets and in the present case, TNCSC has been entrusted to procure Mixes, Table Top Wet Grinders, Electric Fans & Electric Rice Cookers. - goods were sold by the appellant to TNCSC and there is consideration of sale and the goods are covered under Section 4A of the Central Excise Act. The appellants have rightly cleared the said goods on payment of Central Excise duty as per RSP in terms of Section 4A read with Notification No.49/08. - appellants correctly discharged the duty under Section 4A based on RSP basis. Accordingly, we set aside the impugned orders pass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emand of ₹ 75,40,848/- and held that Domestic Electric Food Processor and Table Top Wet Grinders are not intended for sale in retail but for free distribution and also held that TNCSC is an "institutional consumer" and also imposed penalty. Aggrieved by the said order, the appellant filed the present appeal. 3. In Appeal No.E/41665/2013, M/s.LLM Appliances Ltd. are manufacturers of Electric Table Fans and Electric Rice Cookers falling under headings 84145190 and 85166000 respectively. They are registered with Central Excise Department. The goods were notified under Section 4A of the Central Excise Act. Accordingly, excise duty was paid on RSP value under Section 4A of the Central Excise Act in terms of Notification No.49/08-CE (NT) dt. 24.12.2008. They had procured orders from TNCSC for supply of 6,00,000 nos. of Electric Table Fan at the rate of ₹ 930/- + VAT per piece and also 2,12,227 pieces of Electric Table Fans @ ₹ 930/- + VAT per piece inclusive of all taxes, unloading charges for delivery at the destination. Accordingly, they have cleared the goods on payment of appropriate central excise duty on RSP value under Section 4A of the Central Excise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itals or any other service institutions who buy packaged commodities directly from the manufacturer for use by that institution". (v) TNSCS is a Govt of Tamil Nadu undertaking distinct from "institutional consumer" as the goods are not consumed by TNCSC or the TN Govt but supplied to eligible beneficiaries who are the citizens of the country, the ultimate consumers. (vi) Commissioner's finding that TNCSC is a service institution is erroneous and TNSCS cannot be considered as "institutional consumer". The appellants have cleared the goods as per LMR Rules, duly packaged and MRP affixed and markings and the goods were sold to TNCSC. There is an element of sale in the transaction between the appellant and TNCSC and Section 4A would be rightly applicable. (vii) TNCSC in turn supplied the goods to poorer sections is not the relevant criteria to decide the applicability of Section 4A. Once the goods are covered under L.M.R as "packaged commodity" and their RSP is to be declared on the package and sold Section 4A is rightly applicable and cannot be assessed under Section 4 of the Central Excise Act. He relied upon the following decisions :- (1) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5.5 He relied on the following citations :- (i) Jayanti Food Processing (P) Ltd. Vs CCE Rajasthan 2007 (215) ELT 327 (SC) (ii) Rallis India Ltd. Vs CCE Nagpur 2007 (212) ELT 103 (Tri.-Mumbai) which has been upheld by the Supreme Court as reported in 2010 (254) ELT A73 (SC) (iii) Bharti Systel Ltd. Vs CCE Chandigarh 2002 (145) ELT 626 (Tri.-Del.) (iv) CCE Mysore Vs Nestle India Ltd. 2009 (2480 ELT 737 (Tri.-Bang.) (v) Starlite Components Ltd. Vs CCE Nasik 2012 (286) ELT 43 (Tri.-Mumbai) 6. The Ld. Senior Advocate for the appellant has countered the Revenue's submission and submits that TNCSC is not akin to airways, railways, hotels etc. as the TNCSC did not further use the subject goods for their own purpose. It is submitted that the Tribunal in the case of P.G. Electroplast Ltd. (supra) at para 6 & 7 have dealt with applicability of Section 4A. Therefore it is not correct to say that the Tribunal has not dealt with Section 4. He further submits that what is relevant is the condition in which the goods were cleared to TNCSC, as they have sold the goods for consideration and Section 4A is applicable. There is element of "sale" in the transaction between the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Excise Act, 1944 is reproduced as under :- "SECTION 4A. Valuation of excisable goods with reference to retail sale price. - (1)The Central Government may, by notification in the Official Gazette, specify any goods, in relation to which it is required, under the provisions of the Standards of Weights and Measures Act, 1976 (60 of 1976) or the rules made thereunder or under any other law for the time being in force, to declare on the package thereof the retail sale price of such goods, to which the provisions of sub-section (2) shall apply. (2) Where the goods specified under sub-section (1) are excisable goods and are chargeable to duty of excise with reference to value, then, notwithstanding anything contained in section 4, such value shall be deemed to be the retail sale price declared on such goods less such amount of abatement, if any, from such retail sale price as the Central Government may allow by notification in the Official Gazette." It is evident from the above, any excisable goods which are covered under the provisions of Standards of Weights and Measures Act, 1976 or the rules made thereunder are required to declare on the package the retail sale price of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e goods in such cases would have to be determined under section 4A i.e. MRP minus abatement as notified under the Notification issued under section 4A. The appellant have paid duty on the CTVs, in question, sold to M/s. ELCOT on the basis of value determined under section 4A i.e. declared MRP minus abatement. The Department's contention is that in respect of the sales to M/s Elcot, the provisions of suction 4A would not be applicable as M/s. ELCOT are an "Institutional Consumer", as defined in Explanation of Rule 2A(b) of the SWM Rules and, hence, there is no requirement to declare the MRP on the packages of CTVs sold to M/s. ELCOT. 7. In terms of Rule 2A(b) of the SWM Rules, the provision of Chapter II of these Rules would not apply to the packaged commodities meant for "Industrial Consumer" or "Institutional Consumer". In terms of explanation to this Rule, "Institutional Consumers'" means those consumers who buy packaged commodities directly from manufacturers/packers for service industry like transportation including airways, railways or any other similar service industry and "Industrial Consumers" means those consumers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, Electric Fans & Electric Rice Cookers. Therefore, the ratio of the above decision of the Tribunal in the case of PG Electroplast (supra) clearly applies to this case. 12. The case laws relied by the Ld. AR are not applicable to the facts of the case and distinguishable. The Hon'ble Supreme Court decision relied upon by Ld. AR in the case of M/s.Jayanti Foods Processing Pvt. Ltd. (supra) in respect of Civil Appeal No.2819 of 2002 relates to sale of ice creams in bulk pack of 4.0 litres to Hotel industry under whole sale pack not under retail pack. The Hotel industry sells ice cream in scoops in retail to their customers and the Hon. Supreme Court held that the assessment of ice cream whole sale pack of 4.0 litres should be done under Section 4 and not under Section 4A. Whereas in the present case TNCSC is not service industry and the goods are sold to TNCSC not for their consumption or for retail sale. Therefore the above decision is not applicable to the present case 13. The Hon. Supreme Court in the same order of M/s.Jayanti Foods Processing Pvt. Ltd. (supra) in respect of Civil Appeal Nos.2150-2151 of 2004 and others at para 31-34 held that merely because the goods are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amongst the two Members of the Tribunal in Appeal Nos. E/701/2002 & E/962 of 2002 (Civil Appeal Nos. 2150-51 of 2004 before this Court) as to the applicability of Section 4A vis-a-vis Section 4A of the Act to the transactions. The matter, therefore, was considered by the third Member who came to the conclusion that the only applicable provision would be Section 4A. The Third Member found that the goods were cleared with the MRP having been declared on the package. The third Member of the Tribunal further observed that unless the packages themselves were exempt under the SWM (PC) Rules, the assessment would have to be under Section 4A and that the goods were sold in bulk under contract cannot be the criteria. 33. Learned Counsel Shri Subba Rao, however, reiterated his argument that since the goods were sold in bulk the valuation should be under Section 4 of the Act. We have already explained earlier the scope of Section 4A suggesting that the Section would apply to the package if it is required under SWM Act and the Rules made thereunder to declare the MRP thereon. We are not in a position to accept the arguments of learned Counsel that merely because there is a bulk sale to DoT, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e are afraid the specific language of 'retail sale' is not being perceived properly. The 'retail sale' does not have to be only through the 'retail sale agencies' or other 'instrumentalities'. One look at the definition of 'retail sale', as provided in Rule 2(q) is sufficient to justify this inference. The argument is, therefore, rejected. According to Shri Subba Rao further the package would not be a 'retail package' as contemplated in Rule 2(p) as the DoT, MTNL & BSNL cannot be viewed as an individual or group of individuals. We are afraid again the unamended definition of Rule 2(p) is not read properly. When a 'retail package' containing any commodity is produced, distributed, displayed, delivered or stored for sale for consumption by an individual or group of individuals, it would be a 'retail package'. In this case, admittedly, DoT, MTNL & BSNL provided these instruments, after they have purchased the instruments, to the individual customers, though not by way of a 'sale' but for their use. The 'package', therefore, undoubtedly be a 'retail package'. It was further suggested, relying on the definition of 'retail sale price' in Rule 2(r) that DoT, MTNL & BSNL are not the 'ultim ..... X X X X Extracts X X X X X X X X Extracts X X X X
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