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TMI Blog2018 (1) TMI 718X X X X Extracts X X X X X X X X Extracts X X X X ..... nt. - Appeal No. E/459/09 - A/85014/2018 - Dated:- 11-1-2018 - Shri Ramesh Nair, Member ( Judicial ) And Shri Raju, Member ( Technical ) Shri Rajesh Ostwal, Advocate for Appellant Shri H.M. Dixit, Assistant Commissioner (A.R.) for Respondent ORDER Per : Ramesh Nair The fact of the case is that the appellant are engaged in the manufacture and clearance of aerated water. Apart from the clearance in retail sale, they also sold the aerated water to the institutional consumers and assessed said clearance for payment of duty under Section 4A of Central Excise Act, 1944. The case of the department is that the sale made to institutional consumers is not meant for retail sale, therefore, the valuation of such goods should be done under Section 4 read with Standards of Weights and Measures (Packages Commodities), Rules, 1977. The supplies made to institutional consumers do not attract the provisions of any statute which attract mandatory declaration of MRP. Accordingly, a show-cause notice was issued demanding differential excise duty which was culminated into adjudication order No. ACCEX(Div.II)3/2008-09 dated 30.07.2008 whereby the adjudicating authority droppe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as the Hon'ble Supreme Court wherein the following order was passed:- (i) CCE Vs. Liberty Shoes Ltd. - 2015 (326) ELT 422 (SC) 10. A perusal of the order of the CESTAT shows that the Commissioner (Appeals), while allowing the appeal of the respondent-assessee, had recorded specific findings to the effect that the shoes in question which were supplied in packages to the aforesaid customers had MRP affixed on them. It was further found that clearances were not under Rule 34 of the Rules which exempts supplies of materials in bulk from the operation of Weights and Measures Act, meaning thereby it was obligatory and essential on the part of the respondent to affix MRP on the goods supplied. 11. It is also a matter of record that footwear is an item which is specified under Section 4A of the Act. 12. Once we find that the footwear is an item which is specified under Section 4A, which is covered by Weights and Measures Act and Rules, and MRP was affixed on the products supplied, which were not exempted under Rule 34 of the Rules, the provision of Section 4A of the Act shall stand attracted. (ii) Nitco Tiles Vs. CCE - 2015 (315) ELT 296 (T) 6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not in dispute that, on the packages, the appellant has not made any declaration that the packages are not meant for retail sale or the packages are meant for use by any specified industry. In the absence of such markings on the packages, it cannot be said that the goods supplied were not in retail packages. In their letter dated 23-2-2012 the Dy. Controller of Legal Metrology, Maharashtra has clarified that according to Rule 3 Packaged Commodity Rules, 2011 the provision regarding mandatory declaration on retail packages are not applicable to the packages meant and marked as industrial/institutional consumers. Similarly, the Assistant Controller of Legal Metrology, Government of Karnataka, vide letter dated 24/02/2012 has clarified that institutional/industrial package does not bear the MRP marking but will have marking as meant for industrial/institutional consumer and not meant for retail sale. Similarly, Controller of Legal Metrology, Government of Gujarat has clarified that the only packages which bear clear markings meant for industrial consumer or meant for institutional consumer are excluded from the provisions of Packaged Commodity Rules and such packages should have a fu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se by any industry. 5.3 In view of the above, we are of the considered view that, in the present case also, the same ratio would apply. Accordingly, we hold that the discharge of duty liability tiles supplied in retail packages to real estate developers/developers, etc. has to be made under Section 4A of the Central Excise Act, 1944. Therefore the impugned demands are not sustainable in law and accordingly, we set aside the same. 5.4 Thus, the appeals are allowed with consequential relief, if any, in accordance with law. We find that as the goods were already manufactured and intended for retail sale, therefore, they have correctly discharged the duty and the goods cleared in bulk does not mean that they are meant for industrial/institutional consumers. It should be meant for industrial/institutional consumers under the Standards of Weights Measures Rules to pay duty under Section 4 of the Central Excise Act, 1944. (iii) Mexim Adhesive Tapes Pvt. Ltd. Vs. CCE - 2013 (291) ELT 195 (T) 6. We are unable to accept this proposition. As a general Rule, all packaged commodities are required to be printed with MRP and exceptions are specified in Rule 2 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly applied cannot be sustained. (iv) Jayanthi Food Processing (P) Ltd Vs. CCE - 2007 (215) ELT 327 (SC) 37. These appeals are in respect of Mineral Water bottles. The manufacturer used to pack 12 200 ml. bottles in a single package and used to mention the MRP on the said package. The assessee was paying the duty under Section 4A(1) of the Act. The Tribunal, relying on the judgment in Jayanti Food Processing Pvt. Ltd. v. CCE, Jaipur [2002 (141) E.L.T. 162] held that the assessment was bound to be under Section 4A(1) and not under Section 4 of the Act as the package amounted to a retail package in view of the provisions of Rule 2(p) of the SWM (PC) Rules. On that basis the Tribunal came to the conclusion that the valuation was bound to be under Section 4A(1) and not under Section 4 of the Act. Aggrieved by that, the Department has come up before us in the present appeals. Shri Subba Rao, learned Counsel appearing on behalf of the appellant Revenue drew a parallel with Jayanti Food s case and urged that the valuation is bound to be under Section 4 of the Act as the Tribunal had incorrectly held that the package would be a 'retail package'. Learned Counsel rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ltimate consumers. There would be, therefore, no question of application of Rule 2(x)(i). Rule 2(x)(ii) will also not apply as this does not amount to a commodity sole to an intermediary in bulk so as to enable such intermediary to sell, distribute or deliver, the said commodity to the consumer in smaller quantities. The concerned period regarding which the show cause notice was given is April, 2002 to September, 2002. Therefore, Rule 2(x)(iii) which came by way of an amendment into 2000 would also have to be considered. However, even that clause is not applicable as the said package though contains more than 10 bottles, those bottles cannot be viewed as the retail package nor is there any rule requiring labelling the said retail package and declaring the price thereof. In fact there is no price involved as it is specifically written on the 'package not meant for sale'. It is, therefore, obvious that the package containing 12 bottles cannot, therefore, be viewed as a wholesale 'package'. Once that position is clear, there is no question of the applicability of Section 4 of the Act as the package as it is a retail sale of the package to the Jet Airways which supplies ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in mines or quarry. In the present case the goods are sold with MRP without any special packaging indicating an use as Raw material or for use in service industry. Rule 34 (a) framed under the Standards of Weights Measures Act is not applicable. The appellants are statutorily required to declare a MRP on the Refrigerators, have done so, therefore they cannot be denied the benefit of Section 4A assessment. (c) The reliance of the lower authority that subsequently the appellants have stated paying duty under Section 4 cannot be a ground to levy duty under Section 4 when as per law it should be under Section 4A. (vi) Philips Electronics (I) Ltd. Vs. CCE 2007 (215) ELT 49 (T) 3. We have heard both sides. The packages of the goods do not contain any marking unambiguously indicating that the goods have been specially packed for the exclusive use of any industry. Therefore, the goods cannot be treated as exempted from the provisions of the Packaged Commodity Rules even if the statement of the officers of the appellants establishes that the goods were exclusively for use in the hotel industry, in the light of the Tribunal s order in ITEL Industries Pvt. Limited v. Comm ..... X X X X Extracts X X X X X X X X Extracts X X X X
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