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TMI Blog2017 (3) TMI 555X X X X Extracts X X X X X X X X Extracts X X X X ..... rovisions of Rule 34 of the Standard Weights and Measures (PC) Rules,1977, especially since all conditionalities of the said Rule are satisfied. Rule 34 ibid being a special provision, will then override the other general provisions of the said Rules - When the statute has prescribed any special provisions excluding the application of other general provision therein, that special provision will prevail over the general provision - the valuation of the impugned goods would then not be under Section 4A of the Central Excise Act but under Section 4 only. In view of the discussions, and also keeping in mind that there was some genuine confusion concerning MRP assessment under Section 4A of the Act in the initial stages after its introduction, there shall be no penalty on the respondent-assessee. Appeal allowed - decided in favor of appellant. - E/603/2005 (by Dept.) & E/CO/40895/2016 (by Assessee) - 40401/2017 - Dated:- 7-3-2017 - Shri (Dr.) Satish Chandra, President And Shri Madhu Mohan Damodhar, Member (Technical) Shri A. Cletus, ADC (AR) For the Appellant Shri M. Karthikeyan, Advocate For the Respondent ORDER Per : Madhu Mohan Damodhar M/s.Novaa Pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, the sales turnover of respondent was ₹ 1,37,61,357/- for 2000-01, ₹ 1,41,38,357/- for 2001-02, and ₹ 1,25,61,124 for 2003-04 ; and (l) therefore, respondent appeared to have crossed SSI exemption limit but had not paid duty that they were liable to. 3. Accordingly, a show cause notice dt. 11.10.2004 was issued to the respondents proposing that value of the paints cleared to industrial customers should be determined under Section 4 of the Act, demand of Central Excise duty of ₹ 14,15,582/- under proviso to Section 11A (1) ibid, along with interest liability thereon, imposition of penalty under Rule 25 of the Central Excise Rules, 1944 read with Section 11AC ibid. The original authority vide OIO dt. 31.01.2005 confirmed the above proposals. On appeal, the Commissioner (Appeals) vide order dt. 13.4.2005 (impugned order) set aside the order of original authority and allowed the appeal of the assessee on the following conclusions :- (a) The words 'BHEL' and 'BHEL approved' and the paint supplied to M/s.BHEL and M/s.BIDASS will not fall within the ambit of Rule 34 (a) of Standards of Weights and Measures (PC) Rules, 1977 (b) P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the nature of whole sale price. (e) The assessee have not produced any evidence to prove that M.R.P has in fact been affixed on the packages. Since they are exempt from provisions of Rule 34 (a) ibid it is most likely that the assessee did not indicate such MRP on the package. (f) Paint manufactured by he assessee was not sold in retail market and in the absence of retail sales, assessment under Sec.4 only can be made applicable to the assessee. 5. During the hearing, on behalf of the Revenue, Ld. A.R Shri A. Cletus reiterated the grounds of appeal and submitted that the order of Commissioner (Appeals) is not legal and proper, hence liable to be set aside and the order of the original authority is to be restored by allowing the Revenue's appeal. 6. On the other hand, respondent, through their Advocate, Shri M. Karthikeyan, supported the impugned order and reiterated the cross objections filed by them. In their cross-objections, respondent has inter alia contended that the industrial units are the ultimate consumers in the packaged form and there is no further sales from their end. The respondents also contend that after MRP valuation under Section 4A came in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... containing a commodity if:- a) the marking on the package unambiguously indicates that it has been specially packed for the exclusive use of any industry as a raw material or for the purpose of servicing any industry, mine or quarry: Provided that this exemption shall not be available in respect of: (i) any yarn which is sold in hanks to handloom weavers; (ii) any component, part or material used in any workshop, service station or any other place where servicing or repairing of any bicycle, tricycle or motor vehicle within the meaning of Motor Vehicles Act, 1939 (4 of 1939) is undertaken; (iii) any package containing a commodity of net content of 5 kilogram or 5 litre or less, and displayed for sale at the retail outlet. (iv) Any package containing a commodity to be sold by number or length and displayed for sale at the retail outlet. 11. From the facts on record, it clearly emerges that the packages cleared by the respondent were stenciled with the markings BHEL USE ONLY and BHEL APPROVED . There is no dispute on this fact. In this regard, it is observed that Rule 34 of the said Rules provides exemptions from affixture of MRP on packages which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tter understanding : 5. The question, in the ultimate analysis, the whether in input of Sodium Sulphate in the manufacture of paper would cease to be a Raw-Material by reason alone of the fact that in the course of the chemical reactions this ingredient is consumed and burnt-up. The expression Raw-Material is not a defined term. The meaning to be given to it is the ordinary and well-accepted connotation in the common parlance of those who deal with the matter. The ingredients used in the chemical technology of manufacture of any end-product might comprise, amongst others, of those which may retain their dominant individual identity and character throughout the process and also in the end-product; those which, as a result on interaction with other chemicals or ingredients, might themselves undergo chemical or qualitative changes and in such altered form find themselves in the end-product; those which, like catalytic agents, while influencing and accelerating the chemical reactions, however, may themselves remain uninfluenced and unaltered and remain independent of and outside the end-products and those, as here, which might be burnt-up or consumed in the chemical reactions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h markings were distinctly stenciled to indicate that they were for the exclusive use of BHEL. Allegation of the department that MRP prices had not been affixed on the packages so supplied, has also not been satisfactory controverted by respondent with evidence. The said paints are utilized exclusively by BHEL or their ancillary units for use on their final products (boilers etc.) as anti-erosion treatment for use on their original equipment manufactured by them. This being the case, the impugned goods are exempt from affixation of M.R.P in view of the special provisions of Rule 34 of the Standard Weights and Measures (PC) Rules,1977, especially since all conditionalities of the said Rule are satisfied. Rule 34 ibid being a special provision, will then override the other general provisions of the said Rules. That is in conformity with the principle enunciated in the dictum Generalia Specialibus non derogent (general things will not derogate from the special provisions). When the statute has prescribed any special provisions excluding the application of other general provision therein, that special provision will prevail over the general provision. In the circumstances, the valu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and the appellants have not demonstrated that any dealer have sold the material to the retailers. The appellants are marking the packages as Industrial use . Therefore, their products are assessable to payment of duty under Sec. 4 i.e. transaction value . The appellants contention that Rule 34 is an exemption and they were not eligible for this exemption because they had not satisfied the major condition of such rule (1)(a) of Rule 34 viz. the marking on the package unambiguously indicates that it has been specially packed for the exclusive use of any industry as a raw material or for the purpose of serving any industry mine or quarry is not factually correct. I find that appellants have printed the words for industrial use and fulfil the condition of Rule 34. The appellants stand taken that exemption under Rule 34 is not mandatory is not acceptable. The duty liability and interest recovery is therefore confirmed. 5. As against such factual finding, the appellant in the grounds of appeal have not controverted the fact that they were selling the goods to industrial consumers, and also whether they have affixed MRP or not. In the absence of any evidence, we find that the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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