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TMI Blog2017 (1) TMI 970X X X X Extracts X X X X X X X X Extracts X X X X ..... he pack. The price is directly influenced by the weight of the content. The buyer and the seller is fully aware that the product is sold by its quantum though for convenience it is put in unit packages. Hence, it is clear that product like chewing tobacco is sold always with reference to the weight contained in the pouch though the pouch as a unit is sold. Accordingly, we are in agreement with the conclusion reached by the lower authority in the impugned order on this count. In Loknath Prasad Gupta [2006 (8) TMI 58 - CESTAT, KOLKATA], the Tribunal held that 25 pouches of Khaini each containing 5 gms./9 gms. packed in polythene packs without MRP in such package is not governed by valuation under Section 4A. This order of the Tribunal has been affirmed by the Hon’ble Supreme Court in Commissioner of Central Excise, Rajkot Versus M/s Makson Confectionery Pvt. Ltd. [2010 (9) TMI 10 - SUPREME COURT]. Board Circular dated 28/02/2002 which clarified the scope of application of provision of Section 4A. It was noted that SWM Act, 1976 and Rules made thereunder are administered by the State Governments. In case of doubt a clarification may be obtained from the concerned Department of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 1977. The respondent/ assessee was issued with demand notices for confirmation of differential Central Excise duty, as they have not discharged duty in terms of Section 4A based on the MRP based assessment. The respondent/assessee contested the demands on the ground that the retail pouches of tobacco having less than 10 gms. of the goods are not covered by above-mentioned rules and further the pouches containing multiple numbers of such retail tobacco pouches are to be considered as wholesale package and not a multi piece package for retail sale. The Original Authority confirmed the differential duty holding that the respondent/ assessee is liable to pay duty in terms of Section 4A and not on transaction value in terms of Section 4 of the Act. On appeal, the Commissioner (Appeals) set aside the original order and allowed the respondent/assessee s appeal. The Revenue is before us against this impugned order of Commissioner (Appeals). Another appeal by Revenue is against order dated 03/05/2013 of Commissioner (Appeals) who upheld the eligibility of the respondent/assessee for consequential refund relief in view of his findings on non-applicability of Section 4A to the clearances m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dealing with the product to reiterate that the multi piece packages are meant for retail sale. 5. The Revenue relied on the following decisions :- (i) Roys Industries Ltd. vs. CCE, Hyderabad reported in 2010 (259) E.L.T. 387 (Tri. LB) ; (ii) Arora Product vs. CCE, Jaipur II reported in 2012 (276) E.L.T. 77 (Tri. Del.) ; (iii) Radha Tobacco Co. vs. CCE, Kanpur reported in 2016 (339) E.L.T. 328 (Tri. All.). 6. The learned Counsel for the respondent submitted that many retail packages, each containing 6 gms. or 7 gms. chewing tobacco, were put together in a polythene packs. The number of such retail pouches packed together vary from 12 to 52. The polythene bags containing many such retail packs bear the name and address of the manufacturer, description of the commodity, declaration of number of retail pouches and price of each retail pouch as well as net quantity of tobacco contained in the package as required under Rule 29 of the SWM PCR 1977. These are nothing but wholesale packages and were not intended for retail sale. These package did not show MRP of the whole package. He reiterated that the inscription of these packages was, contain 52 retail pouches of M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (e) Milap Zarda Udyog reported in 2012 TIOL 1073 CESTAT DEL. ; (f) Sampre Nutrition Ltd. vs. Commr. of Cus. C. Ex. (Appeals), Hyderabad reported in 2013 (290) E.L.T. 291 (Tri. Bangalore). (g) Swan Sweets Pvt. Ltd. vs. CCE, Rajkot reported in 2006 (198) E.L.T. 565 (Tri. Mumbai) 9. We have heard both the sides and perused the appeal records. We note that, admittedly, chewing tobacco sold in pouches with MRP is covered by the provisions of Section 4A in terms of Notification 10/2003-CE (NT) dated 28/02/2003 which amended Notification 13/2002-CE (NT) dated 01/03/2002. However, the dispute is with reference to chewing tobacco contained in pouches of below 10 gms. net weight. The respondent/assessee cleared such pouches and discharged Central Excise duty on transaction value in terms of Section 4. The Revenue contended that the assessment should be based on MRP value. The crux of the issue is when these chewing tobacco pouches containing less than 10 gms. of net weight were put together (12 to 52 numbers) in the polythene bag whether to consider such polythene bag as a multi piece pack or a wholesale pack. First of all we should dispel any notion to the effect that wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... age. (1) Nothing contained in these rules shall apply to any package containing a commodity if (a) (b) The net weight or measure of the commodity is ten grams or ten milliliters or less, if sold by weight or measure; 10. Notification 13/2002-CE (NT) dated 01/03/2002 as amended by Notification 10/2003-CE (NT) dated 01/03/2003 was issued in terms of Section 4A of the Act. The said notification specified, among other goods, Tariff Heading 2404.41 as goods covered by MRP based valuation. Section 4A (1) empowers Government to specify any goods in relation to which it is required, under the provisions of Standards of Weights and Measures Act, 1976 or the rules made thereunder or under any other law for the time being enforced, to declare on the package thereof the retail sale price of such goods, to which the provisions of sub-Section (2) shall apply. It is apparent on reading the provisions of Section 4A and the notification issued thereunder that the assessment under Section 4A is linked to the provision of SWM Act, 1976. It is pertinent to note that the said Act and the Central Excise Act, 1944 were enacted for different purposes and the scope and intentions a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Standards of Weights and Measures (Packaged Commodity) Rules, 1977, the lack the specificity that a taxation statute is required to possess is not surprising. The definitions that distinguish the packaging to which the prescriptions apply should be viewed in that context. The objective being the protection of consumer interests, the prescriptions under the Rules are designed for declaration on the packing intended for delivery as such to the ultimate user. The manufacturer is not required to conform to the prescriptions on other packaging intended for convenience of handling. 15. The pivotal expression in the definitions is intended for. The intent is not manifest in a declaration but the intent of the manufacturer is implicit in the compliance with the prescriptions. It is for that reason that the statute itself contains the circumstances in which penalties can be visited upon the handlers if the prescriptions are flouted on packages displayed for sale by retailers. Likewise, Central Excise Act, 1944 has, since 1999, provided for penal consequence in the event of non-compliance and, since 2003, provided for re-assessment. The State cannot, except under health and safety law ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Packaged Commodities) Rules, 1977 crystallises the assessment method upon declaring retail sale price on an package cleared from the factory except when the provisions Rule 2A or Rule 34 is attracted. 18. Having perused the records in detail, we notice that there is no finding that the secondary packing containing the glue sticks and correction pens had retail selling price declared on them. Nor is there any allegation that the said goods were displayed for sale to the ultimate consumer in the secondary packing. Consequently, the packages are not multi-piece packages as it was, apparently, not the intent of the manufacturer to sell the goods to the ultimate consumer in the secondary packing. And as retail selling price is not declared on the secondary packages, section 4A of Central Excise Act, 1944 is not applicable. The pieces inside the secondary packing are, apparently, intended for sale only as individual pieces at the last point of sale to the ultimate consumer. 19. These individual pieces did have the retail sale price declared on them; however, the net weight or measure contained in each of the sticks and pens do not exceed 10 grams and 10 milliliters respective ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icable to the sale of wholesale package and the ratio of Kraftech Products (supra) would apply to sale of multi-piece retail packages. If the total weight of multi-piece retail package is above 20 grams as in the said case, the MRP based valuation would apply. We note the case of the Revenue in the present proceedings is not supported by the reliance on the decision of the Tribunal in Roys Industries Ltd. (supra). In the present case, the polythene pack containing multiple pieces of chewing tobacco pouches of 6 gms. or 7 gms. do not carry the MRP of such polythene pack. As such, the ratio of the decision of the Tribunal in Swan Sweets Pvt. Ltd. (supra) is applicable to the present case. The Larger Bench in Roys Industries Ltd. (supra) observed that the Department s appeal against the order in Swan Sweets Pvt. Ltd. is pending in Hon ble Supreme Court. We note that the said decision of the Tribunal in Swan Sweets Pvt. Ltd. has since been affirmed by the Hon ble Supreme Court as reported in 2010 (259) E.L.T. 5 (S.C.). 12. Similarly, we find the reliance placed by the Revenue on the decision of the Tribunal in Arora Product (supra) and Radha Tobacco Co. (supra) is also not appropria ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pra), the Tribunal held that 25 pouches of Khaini each containing 5 gms./9 gms. packed in polythene packs without MRP in such package is not governed by valuation under Section 4A. This order of the Tribunal has been affirmed by the Hon ble Supreme Court (supra). In Swan Sweets Pvt. Ltd. (supra), the Tribunal examined, in detail, the implication of the terms intended for retail sale and sold to ultimate consumer . When the manufacturer intends the wholesale pack to be sold to a retailer and not to ultimate consumer the assessment under Section 4A is not sustainable. The said decision of the Tribunal was affirmed by the Hon ble Supreme Court, as mentioned earlier. 14. We also referred to Board Circular dated 28/02/2002 which clarified the scope of application of provision of Section 4A. It was noted that SWM Act, 1976 and Rules made thereunder are administered by the State Governments. In case of doubt a clarification may be obtained from the concerned Department of the State Government. In the present case, we note that for a situation covered by same set of facts, clarification was sought by the industry from the Legal Metrology Department. In response to letter dated 28/07/ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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