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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 ..... to those retail pouches containing tobacco weighing 6 gms. and 7 gms. each. The said pouches are then packed in a polythene pack. The polythene pack contained 52/ 42/40/32 pouches. The respondent/assessee claimed that the tobacco cleared in 6 gms./7 gms. pouches are not covered by the provisions of Notification 10/2003-CE (NT) dated 01/03/2003. The Revenue contended that the polythene pack containing these many numbers of tobacco pouches should be considered as multi piece package in terms of Standards of Weights and Measures (Packaged Commodity) Rules, 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re individually packaged, labeled pieces of the same commodities of identical quantity, intended for retail sale, either in individual pieces or the package as a whole. The learned AR submitted that in terms of this definition it is clear that the respondent is clearing tobacco pouches in multi piece package and not in wholesale package. Wholesale package is a package containing a number of retail packages intended for sale to an intermediary and not intended for sale to a single consumer. 4. The learned AR also relied on the statements given by persons who are 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 tog ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s affirmed by Hon'ble Supreme Court reported in 2014 (301) E.L.T. A70 (S.C.); (b) Loknath Prasad Gupta vs. CCE, Kolkata III reported in 2006 (204) E.L.T. 412 (Tri. Kolkata) as affirmed by the Hon'ble Supreme Court in 2010 (259) E.L.T. 5 (S.C.) ; (c) CCE, Vapi vs. Kraftech Products reported in 2008 (224) E.L.T. 504 (S.C.) ; (d) Central Arecanut & Cocoa Marketing & Processing Co-op. Ltd. vs. CCE, Mangalore reported in 2008 (226) E.L.T. 369 (Tri. Chennai) as affirmed by the Hon'ble Supreme Court reported in 2008 (232) E.L.T. A107 (S.C.) ; (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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able of being sold separately such multi-piece package shall also bear thereon a declaration as to the number of Smaller packages contained therein and the quantity contained in each such smaller package." Chapter V of the Standard of Weights & Measures (Packaged Commodities) Rule 1977 relate to exemptions from the provisions of these rules. Rule 34 provided for exemption in respect of certain packages. The relevant provision contained in Rule 34 is to the following effect: Exemption in respect of certain package. (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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y 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 boost prices. Considering the nature and intent of the 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 declaratio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Act, 1944 and the Standards of Weights and Measures (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 packin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refully. In the said decision it is recorded that the poly packs and pet jars are sold in retail. There is evidence that weight, MRP, number of pieces are printed on the labels of the poly packs and pet jars. The Tribunal distinguished the decision of the Hon'ble Supreme Court in Kraftech Products (supra) stating that the total weight of all pieces together does not exceed the limit prescribed for such packages. The Tribunal observed that the ratio of Swan Sweets Pvt. Ltd. (supra) is applicable 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 13. In Gupta Tobacco Co. (supra), the Tribunal held that chewing tobacco was not capable of being sold in numbers but was sold in weight of 5, 7 and 9 gms. pouches with no requirement for MRP under SWM Rules. The said decision has been upheld by the Hon'ble Supreme Court (supra). In Loknath Prasad Gupta (supra), 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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