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TMI Blog2016 (11) TMI 1084X X X X Extracts X X X X X X X X Extracts X X X X ..... ing individual packaged commodities are ‘multi-piece’ packing and found them to be not so but packing not intended for sale to the ultimate consumer and having accepted the claim for exemption from ambit of Standards of Weights and Measures (Packaged Commodities) Rules, 1977 owing to the individual packages being less than the prescribed threshold, we uphold the impugned order and dismiss the appeal of Revenue. Cross-objection is also disposed off. - E/546/2007 - /87050-87051/16/EB - Dated:- 15-4-2016 - Shri M V Ravindran, Member (Judicial) and Shri C J Mathew, Member (Technical) Shri N N Prabhudesai, Superintendent (AR) for the appellant Shri G L Deshpande, Advocate, for the respondent ORDER Revenue, aggrieved by order-in-appeal no. SVS/33/NGP-I/2007 dated 18th January 2007 of Commissioner of Central Excise Customs (Appeals) Nagpur, seeks reversal of the decision of the first appellate authority to set aside the demand of tax from M/s Sony Polymers Pvt Ltd (Unit II). The dispute relates to demand of ₹ 2,87,485/- short-levied as duty on clearances of glue sticks and correction pens during June 2005. The assessee had discharged duty liability during ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that are required to carry the retail selling price in conformity with the above referred enactment and so notified as to render section 4A(2) applicable are to be assessed on the retail selling price after deducting the abatement provided in a valid notification issued under this section. The Standards of Weights and Measures Act, 1976 is concerned primarily with prescribing the standards of measurement to be complied with by manufacturers and packers and its enforcement thereof. Section 83 of the said Act, however, enables the Central Government to frame rules and the Standards of Weights and Measures (Packaged Commodities) Rules, 1977 have been notified for ensuring rights of consumers in relation to pre-packaged commodities. Central to the statutory instrument is the physical impossibility of ascertaining the contents and quantity of goods during the course of sale owing to it having been packaged out of sight of the ultimate consumer. Hence the emphasis on ultimate consumer and retail packing in prescribing the requirements. 2. The dispute revolves around the exclusion of the application of the Rules in: 34. Exemption in respect of certain packages - (1) Nothin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s capacity in packs of 20 and 10 pieces each. The original authority found that the sticks of glue containing 10 grams each are not within the ambit of the exemption from declaration of retail selling price in Rule 34 of Standards of Weights and Measures (Packaged Commodities) Rules, 1977 and that the larger package of 20 pieces were also required to conform to prescription in Rule 17 supra. Likewise, in relation to correction pens , it was held that the sale, being in numbers, is not covered by the exemption in Rule 34 supra which is restricted to goods sold by weight and volume. The first appellate authority, relying on the decision of the Tribunal in Swan Sweets Pvt Ltd others v. Commissioner of Central Excise, Rajkot/Gwalior [2006 TIOL 229 (CESTAT-Mum)], controverted the finding of the lower authority by holding that these were wholesale packages and hence not required to carry retail selling price prescribed in Rule 17. The finding of the original authority that correction pens were sold by number was held to be untenable by the first appellate authority as the measurement unit referred to in the schedule to the Central Excise Tariff Act, 1985 is in kilograms. 5. R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a unit of sale. The Commissioner (Appeals), Central Excise, Nagpur is therefore mistaken in passing order for assessment of captive product under 4 of Central Excise Act, 1944 which is specified in Notification No. 13/2002-CE(NT) for assessment on the basis of Retail Sale price with specified percentage of abatement from such Retail Sale price. 6. Learned Authorised Representative was as clueless as we are in deciphering the two sentences that the review authority considered to be of sufficient import. We may be forgiven for our lack of perspicacity which precludes us from a clearer interpretation than that any notification issued under section 4A(1) of Central Excise Act, 1944 does not need to garner support from a law other than the Central Excise Act, 1944 for validity as a mechanism for assessment. If we are wrong, we are amenable to rectification but, if we are not, it is further demonstration of lack of application of mind by the appropriate authority. 7. We, as the designated Tribunal to hear appeals that are subject only to appeal before the judicial organ established by the Constitution of India, cannot but be pained by the betrayal of ignorance amplified unmistak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that do not appear to be legal and proper. Impliedly, all orders are to be subject to such ascertainment but, in practice, appeals are filed only against orders that have been decided by the first appellate authority against Revenue. Recourse to the jurisdiction of the Tribunal is, thereby, thrust upon an assessee whose contentions have been upheld by Commissioner (Appeal) which is a senior position in the tax hierarchy. Hence, the conferment of powers of review upon an equally senior level whose wisdom is presumed to be doubled by sheer force of numbers. Half-hearted review or abdication of the power in favour of levels deemed to be incompetent on account of experience and maturity is gross contravention of the responsibility that accompanies conferment of power. For Revenue, such appeals do not cause incremental burden but they do impose additional costs on the assessee even when the matter has been decided in their favour. This power to appeal is, therefore, to be exercised with appropriate sagacity and consideration. Hectoring by us may not be visited with appropriate course correction. That consummation can be achieved only by the supervisory authorities. We do hope that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt to dovetail assessment of excise duty with this existing statutory prescription; nevertheless, the dovetailing notwithstanding, it must be conceded that the expressions may not have the same contextual meaning as assigned or interpreted in tax legislation because the objects and reasons are not, necessarily, congruent. 14. Manufacturers, in the natural order of activities, undertake production and utilise channels for distribution of the products. A proprietorial interest is implicit in packaged products and manufacturers, generally, tend to clear goods that are intended for retail market in packages deliverable as such to customers, whether directly or through a channel of distribution. The consumer does not have the opportunity to use the senses to grade the goods against the wish-list in the mind. Nor is it possible to verify the measure of such pre-packaged commodities. The Standards of Weights and Measures Act, 1976 and the rules notified thereunder are intended to ensure that the consumer is not deluded into purchasing goods that was not intended to be. The prescription of retail sale price ensures that the retailer cannot take advantage of local demand-supply gap to bo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to buy the product is not germane to determination of applicability of the Standards of Weights and Measures (Packaged Commodities) Rules, 1977. Retail packages do not pose the problem of applicability of Rules. Except to the extent that they are less than the stipulated weight or measure in Rule 34, the intent is apparent in marking of retail sale price and other information on the package. The definition of wholesale package in Rule 2(x) of Standards of Weights and Measures (Packaged Commodity) Rules, 1977 and Chapter IV of the Rules distinguish the intent of the manufacturer by the exclusion of retail sale price on the package. This confirms our view that packages containing more than one piece or package may be for retail or whole-sale distribution and the intent for retail distribution in the secondary packing is made apparent by declaring the retail sale price thereon. 17. The Rules supra were not notified with taxation as an objective. It predates the incorporation of section 4A in Central Excise Act, 1944. It is the manufacturer who is obliged under Central Excise Act, 1944 to discharge the duty liability and a harmonious construction of section 4A of Central Excise A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scription of data, including weight, on the packaging in the Rules and Rule 34 also would be otiose. The original authority appears to have confused the outer packing in the shape of a pen , which is merely the container, with the material inside. Therefore, the sticks and pens containing commodities that are below the threshold prescribed for compliance with the Standards of Weights and Measures (Packaged Commodities) Rules, 1977 are beyond the ambit of section 4A of Central Excise Act, 1944. 20. In Varnica Herbs v C.B.E. C., New Delhi [2004(163)ELT 160 (Mad)], relied upon to canvass the appeal of Revenue, the Hon ble High Court of Madras was resolving a dispute relating to application of MRP-based valuation of herbal hair dye contained in photo protective pouches with a net weight of 8 gms with six such pouches packed in a mono-carton. The issue before the Hon ble High Court was the validity of circular no. 492/58/99-CX dated 2nd November 2009 which directed that 5. In view of the above statutory requirement for declaration of retail sale price under the Standards of Weights and Measures (Packaged Commodities) Rules, 1977 for multi-piece packages, it is clarif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oducts Inc which is not an issue in the present despite as the clearance is not in multi-piece package but in whole sale package. Likewise, the secondary packing in the present dispute does not declare retail selling price in contradistinction with the secondary packing of goods cleared by M/s Arora Products. The decision of the Hon ble High Court of Madras in re Varnica Herbs does not advance the cause of Revenue owing to the judgment of the Hon ble Supreme Court in Commissioner of Central Excise v. Kraftech Products Inc [2008 (224) ELT 504 (SC)] (extracted in re Arora Product) holding that: 15 . . .... 23.... The illustration appended to Rule 2(j) bring out clearer picture. It states that the combined net weight shall be taken into consideration for the purposes mentioned therein. After combined net weight is taken into consideration for the applicability of the Rules, there is no reason as to why the said purpose shall not be considered to be a relevant factor for applying the exemption provision. Assuming that Rule 2(j) was otherwise vague or unambiguous, illustration appended thereto brings out the true meaning and purport thereof. The reasoning adopted ..... X X X X Extracts X X X X X X X X Extracts X X X X
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