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TMI Blog2015 (10) TMI 1570X X X X Extracts X X X X X X X X Extracts X X X X ..... Heading 3305 of CETA, 1985. During the relevant period, the said PHD was packed in sachets weighing 3 grams on which its MRP was declared. The sachets numbering 6/8 were then placed in one mono pack/carton on which the total MRP of all sachets was also declared/printed. The appellant discharged duty on the PHD by determining its value from the MRP declared on the mono pack under Section 4A of CEA, 1944 after claiming allowed abatement under the relevant Notification as was applicable to the said PHD during the relevant period. 3. The allegation of the Revenue is that in view of Rule 34(b) of The Standards of Weights & Measures(Packaged Commodities) Rules, 1977(herein after called as PC Rules,1977) or The Legal Metrology (Packaged Commodities) Rules,2011 (herein after called as PC Rules,2011), since each sachet printed with MRP was weighing 3 grams(i.e. less than 10 grams), even though cleared in 6/8 numbers in the mono pack/cartoon, on which no MRP was required to be affixed, hence, such PHD was liable to be assessed under Section 4 and not under Section 4A of CEA,1944. The first show cause cum demand notice was issued (Excise appeal No. 70200) on 15/12/2011 demanding duty for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is his submission that the Department has not produced any evidence to prove that the individual sachets were retail packs and intended to be sold in retail. It is his contention that when the Department does not dispute the mono cartons/packs itself a retail package, there is no question of not treating the same as the products under assessment. 6. The Ld. Advocate further submitted that the mono carton/pack was retail package and intended for retail sale only was also evident from a scheme introduced by the appellant for a particular period. Under the said scheme it was informed to the consumers by printing the text on the mono pack indicating that a soap valued at Rs. 10/- was offered free with the purchase of the mono pack. This clearly indicates that the appellant's intention was to sell the mono cartoons/pack in retail and consequently the assessment of the goods ought to be under Section 4A of CEA, 1944. 7. Further, referring to the definition of 'wholesale package' under the PC Rules,1977 or PC Rules,2011 the Ld. Advocate submitted that the packages which are not intended for sale direct to a single consumer would be qualified as a wholesale package. It is h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble value under Sec.4. He submits that in Appeal No. (E-70200/13), the SCN dt. 15.12.2011 adopting the average selling price the total assessable value under Sec. 4A was arrived as Rs. 124 crore and the assessable value under Sec. 4 as Rs. 155 crore. consequently, the differential duty of Rs. 3,18,82,387/- was demanded on the differential assessable value of Rs. 31Crore (approx.). It is contention in computing the demand two major errors have occurred viz. value was determined by assuming MRP as the assessable value under Section 4 of CEA,1944 for certain period and for the remaining period, the sale price was considered, which was inclusive of entry tax @ 1% and the excise duty. It is his contention that the valuation has to be carried out in accordance with Section 4(1)(b) read with Rule 7 of Central Excise Valuation (Determination of Price of Excisable Goods) Rules 2000. It is his submission that if the correct value is determined, in accordance with the aforesaid provisions, the demand of duty would drastically be reduced from Rs. 3,18,82,387/- to Rs. 52,72,446/-. 10. In relation to appeal No. (E-76111/14), the Ld. Advocate submitted that the depot sale price, which was cum du ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ims from time to time and upto March, 2009, refund has been sanctioned to them. Further, he has submitted that the two demand notices were issued in December, 2011 and December, 2012 after passing the Orders sanctioning refunds and reviewed by the Department; it indicates that the relevant facts are within the knowledge of the Departmental authorities, hence, the demand is barred by limitation. 13. Rebutting the allegation of the Revenue that the information sought for by the department was not furnished, the Ld. Adv. submitted that it is ex-facie erroneous and contrary to facts on record. It is his argument that once the refund claims and also ER-1 Returns are filed on monthly basis with the proper officer, hence no other information required to be furnished to the Department to arrive at the conclusion, whether the valuation has to be carried out under Section 4 or Section 4A of CEA, 1944. He submits that on the aforesaid grounds also the penalty under Section 11AC is also not imposable. 14. Per contra, the Ld. A.R. (Commissioner) for the Revenue has submitted that the goods in question viz. PHD is sold in a multiple piece package and MRPs affixed on the mono pack as well as on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o be sold separately; but there is no such marking on the mono pack. 17. He has further, submitted that there was no need of affixing MRP on the individual sachets for example, a mono pack containing three packs of dove soap which is to be sold at a lesser price than the price of each cake of soap multiplied by three are packed in such a manner that the individual soap cannot be taken out without destroying the packing and further, the individual cakes of soap do not bear any MRP as the intention was not to sale the individual pieces of soap separately. It is clearly marked on the mono pack of dove soaps that the mono pack is to be sold as such. It is his submission that in the present case none of the above mentioned features have been used for selling mono pack of PHD. Further, the mono pack does not advance any price discount for buying 6 to 8 sachets Powder Hair Die (PHD) as such discount is normal practice in the trade while selling multi piece packages. 18. Similarly, the appellants also affixed MRP on multiple piece packages although there was no legal requirement to do so which has been done with the sole intention and purpose to come within the purview of Section 4A of C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inted on the mono pack. The said PHD has been notified under The Standards of Weights and Measures Act,1976 or The Legal Metrology Act, 2009 and the Rules made thereunder and also specified under Sec. 4A of CEA,1944. The core issue for determination is: whether the PHD be assessed to duty by determining its value under Section 4 or under Section 4A of CEA, 1944. 22. The arguments advanced on behalf of the appellant indicates that since the manufactured PHD( 6/8 sachets weighing 3 gms. each) in mono pack, exceeds 10 gms, accordingly, fall outside the provisions of Rule 34(b) of PC Rules, 1977 & Rule 26(a) PC Rules, 2011. Besides, after deletion of the definition of multi piece package from the PC Rules, 1977 and in absence of such definition under the PC Rules, 2011, the mono pack satisfies the definition of "retail package", as the mono pack was intended to be sold in retail to the ultimate consumer. Consequently, the same are liable to assessment under Sec.4A of CEA, 1944. 23. On the other hand, the contention of the Revenue is that the mono pack is a multi piece package. Consequently, on deletion or absence of such definition under the relevant Rules, there is no requirement of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shall be liable to confiscation and the retail sale price of such goods shall be ascertained in the prescribed manner and such price shall be deemed to be the retail sale price for the purposes of this section. Explanation 1.- For the purposes of this section, "retail sale price" means the maximum price at which the excisable goods in packaged form may be sold to the ultimate consumer and includes all taxes, local or otherwise, freight, transport charges, commission payable to dealers, and all charges towards advertisement, delivery, packing, forwarding and the like and the price is the sole consideration for such sale: Provided that in case the provisions of the Act, rules or other law as referred to in sub-section (1) require to declare on the package, the retail sale price excluding any taxes, local or otherwise, the retail sale price shall be construed accordingly. Explanation 2.- For the purposes of this section, - (a) where on the package of any excisable goods more than one retail sale price is declared, the maximum of such retail sale prices shall be deemed to be the retail sale price; (b) where the retail sale price, declared on the package of any excisable goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... kage' has been adopted in the Legal Metrology (Packaged Commodities) Rules, 2011. 27. There is no need to emphasize that provisions of Section 4A would be applicable only to those manufactured goods which are chargeable to ad valorem rate of duty. The other principal condition necessary to be fulfilled is that the specified goods, in relation to which it is required, under the provisions of The Standards of Weights and Measures Act, 1976 or the Legal Metrology Act, 2009 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. 28. In other words, the specified goods must be subjected to the provisions of The Standards of Weights and Measures Act or The Legal Metrology Act, and the Rules made thereunder so as to be assessed under Sec.4A of CEA,1944. The CBEC in its Circular No. 625/16/2002-CX dated 28.02.2002 clarified as: "5. A somewhat similar issue was examined by the Board earlier vide letter F.No. 341/64/97-TRU, dt. 11/08/1997 (1997 (95) E.L.T. T3). This clarification was issued in the context of certain assesses printing MRP on packages even where there was no statutory requi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be instances where the same notified commodity would be partly assessed on the basis of MRP under Section 4A and partly on the basis of normal price prior to 1-7-2000 or transaction value from 1-7-2000. Again merely because the goods are specified items under Section 4A(1), that by itself will not be a be all and end all of the matter as before such goods are brought in the arena of Section 4A(1), there would have to be the satisfaction of a particular condition that the packages of such goods are "required" under the SWM Act and the Rules made thereunder to declare the MRP. The Tribunal has even erred in holding that the circular dated 28-2-2002 is not applicable to the present case. A cursory glance at the circular would suggest that it is applicable to the present case where two commodities have been sold as a market strategy." 30. In the above background the arguments advanced by both sides need be to examined to ascertain whether it is required to affix the MRP on the sachets or mono pack or on both. The contention of the appellant is that in absence of definition of multi piece package, the amended definition of 'retail package' covers the appellant's case. It i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is relevant to refer the guidelines of the Board in the said circular dt. 28.02.2002: "7. The Standards of Weights & Measures Act, 1976, and the rules made thereunder, are administered by the State Governments. Instances of dispute could arise between the deptt. and the assesse as to whether, in respect of a particular commodity/transaction, the assesse is exempted from declaring the retail price or not. In case of such doubt a clarification may be obtained from the concerned Deptt. (generally the Metrology Deptt.) of the State Government." 33. The Revenue argued that other manufacturers similarly situated do not affix the MRP on the contents but on the mono pack. The plea of the Appellant is that on the issue of printing MRP on the Sachets and also on the mono packs no objection was raised by the Legal Metrology Department. In these premises, to determine whether the appellant is required to affix MRP after deletion of the definition of 'multi piece packages' from the PC Rules, 1977 and in absence of any such definition under the present PC Rules, 2011 on the mono pack and/or on the sachets , the issue needs to be referred to the Metrology Department of the respective ..... 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