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TMI Blog2022 (11) TMI 1225X X X X Extracts X X X X X X X X Extracts X X X X ..... MMISSIONER OF CENTRAL EXCISE, RAJASTHAN [ 2007 (8) TMI 3 - SUPREME COURT ]. Reliance placed by the Revenue on the case of FEDERATION OF HOTEL AND RESTAURANT ASSOCIATIONS OF INDIA VERSUS UNION OF INDIA AND ORS. [ 2018 (1) TMI 1221 - SUPREME COURT ] also does not help the case as the issue involved in the said case was not with reference to the provisions of Section 4A of the Central Excise Act. In the said decision Hon ble Supreme Court has held that the sale of packaged mineral water by hotel to their clients is inclusive of the cost of bottle plus the services provided. Accordingly they have held that the sale at price higher than the affixed MRP is not in contravention of the provisions of Legal Metrology Act. There is no merit in the impugned order - appeal allowed. - Excise Appeal No. 790 of 2012 - FINAL ORDER NO. A/86077/2022 - Dated:- 3-11-2022 - MR. SANJIV SRIVASTAVA, MEMBER (TECHNICAL) AND DR. SUVENDU KUMAR PATI, MEMBER (JUDICIAL) Shri H.G. Dharmadhikari, Sr. Advocate with Ms. Lalita Phadke, Advocate, for the Appellant Shri Dhirendra Kumar, Joint Commissioner, Authorised Representative for the Respondent ORDER This appeal is directed aga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... detailed in Annexure 'A' short paid during the period December,2008 to January,2009 should not be demanded under Section 11A of Central Excise Act, 1944. ii) interest on the differential duty should not be recovered from them under the provisions of Section 11AB of the Central Excise Act, 1944. iii) Penalty should not be imposed upon them under Rule 25 of Central Excise Rules, 2002. 2.3 The show cause notice was adjudicated by the order-in-original referred in para 1 above. Appeal filed by the appellant before the Commissioner (Appeals) has been rejected. Aggrieved appellant has filed this appeal. 3.1 We have heard Shri H.G. Dharmadhikari, Sr. Advocate with Ms. Lalita Phadke, Advocate for the appellant and Shri Dhirendra Kumar, Joint Commissioner, Authorised Representative for the Revenue. 3.2 Arguing for the appellant, learned counsel submits that:- Packaged drinking water is specified as per Notification No. 2/2006 (NT) dated 01.06.2006 as amended from time to time and has to be valued as per the provisions of Section 4A of the Central Excise Act, 1944 on the basis of the declared MRP/RSP. Appellant has followed the said procedure and paid t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d at [2017 (345) ELT A138 (SC)]. Reliance is also placed on the decision of Hon ble Supreme Court in the case of Hotel and Restaurant Associations of India [2018 (359) ELT 97 (SC)]. Accordingly he submits that the appeal should be dismissed. 4.1 We have considered the impugned order along with the submissions made in appeal and during the course of arguments. 4.2 Commissioner (Appeals) has in his order observed as follows:- It was held by the adjudicating authority that the principal manufacturer was an institutional customer and under Rule 2A of Standard of Weight and Measures (Packaged Commodities) Rules, 1977 read with Rule 34 ibid, M.R.P. was not required to be declared on the packages. The said Rule 2A as amended vide GSR 425(E) dated 17.7.06 is as follows. 2A. Applicability of the Chapter- The provisions of this chapter shall not apply to,- (a) packages of commodities containing quantity of more than 25 kg or 25 litre excluding cement and fertilizer sold in bags up to 50 kg; and (b) packaged commodities meant for industrial consumers or institutional consumers. Explanation:- For the purpose of this rule,- a) Institutional con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not under Rule 10A(1) of the Central Excise Valuation (Determination of price of excisable goods) Rules, 2000. However, I do not find any merit in the said contention. In terms of the explanation given in respect of a Job worker under Rule 10A of Central Excise (Valuation) Rules, 2000 a person who manufactures or produces goods for or on behalf of principal is a job worker. The contention that they were subcontractors and the transaction was not one of job work, is devoid of any merit. In the circumstances valuation of the goods was required to be made to be made under Section 4(1)(a) of the Excise 1944 read with Rule 10A of Valuation Rules, 2000. 4.3 We do not find the decision relied upon by the Revenue to support the case of the Revenue. In the case of Bajaj Food Products (P) Ltd. [2015 (317) ELT 116 (Tri.-Del.)], the decision of Hon ble Supreme Court in the case of Jayanti Food Processing Pvt. Ltd. [2007 (215) ELT 327 (SC)] stating as follows:- 6 . The appellants have referred to the case of Jayanti Foods Pvt. Ltd. in their support. The facts obtaining in that case were entirely different. The goods involved in that case carried proper MRP as per the requirements of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Packaged Commodities) Rules, 1977 the goods were required to be sold on the declared and printed MRP only. As we have pointed out earlier, where the goods were actually sold in retail, Section 4A of the Central Excise Act will become applicable as has been held by Hon ble Supreme Court in the case of Jayanti Food Processing (P) Ltd. [2007 (215) ELT 327 (SC)] as follows:- 13 . Learned Counsel for appellant took us through the rules extensively which rules we have already quoted above. The thrust of the argument was that firstly the assessee could not be said to be a retail dealer as contemplated in Rule 2(o) of the SWM (PC) Rules nor could the package be described as retail package to be covered under Rule 2(p). Learned Counsel firstly suggested that the assessee was not directly selling the package to the consumer, he was in fact supplying the package to the intermediary for being sold to the hotel industry. Learned Counsel, therefore, argues that there was no connection in between the assessee and the consumer nor was the package meant to be sold as a package . The counsel is undoubtedly right as Rule 2(o) contemplates the sale of commodity in a packaged form directly t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the package. It is the case of the appellant that the four litres pack was not meant to be sold as the package to the ultimate consumer and the sale was only to the intermediary or as the case may be, to the hotel. If that was so, then there is no necessity much less under Rule 6(1)(f) to mention the retail sale price on the package. 14 . It was tried to be suggested, relying on the language of the unamended Rule 2A, that the four litres pack of ice-cream would be appropriately covered under Rule 2A. Rule 2A before the amendment was as under : 2A. The provisions of this Chapter shall apply to all pre-packed commodities except in respect of grains and pulses containing quantity more than 15 kg. It is true that if the unamended section is to be made applicable, the ice-cream pack of four litres would certainly be covered under Section 2A. However, Rule 3 explains that provisions of Chapter II would apply to packages intended for retail sale and expression package wherever it occurs in the chapter shall be construed accordingly. It is, therefore, clear that the package which was sold by the assessee could not be termed as retail package nor the sale the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... broad enough to include the transaction in question, i.e., the sale of a pack of ice-cream to the retail industry. Hotel does not manufacture the ice-cream and is depended entirely upon the sale of ice-cream to it by the assessee for ultimately catering the commodity in the package, i.e. ice-cream to the ultimate consumer. In our view this can be squarely covered in the term servicing any industry . The word service is a noun of the verb to serve . This Court in Coal Mines Provident Fund Commissioner v. Ramesh Chander Jha [AIR 1990 SC 648] in a different context, observed as under : The word service in Section 2(17)(h) must necessarily mean something more than being merely subject to the orders of Government or control of the Government. To serve means to perform functions; do what is required for . [Emphasis supplied] A hotel is a hospitality industry and undoubtedly supplies food and eatables to the consumers. Therefore, to supply the ice-cream to such a hotel would be doing what is required for the hotel. In that sense the supply by way of sale of ice-cream which is ultimately sold to the ultimate consumers would, no doubt, be covered in the term servicin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which were not exempted under Rule 34 of the Rules, the provision of Section 4A of the Act shall stand attracted. 13 . The issue is no more res integra and has been elaborately dealt with by this Court in Jayanti Food Processing (P) Ltd. v. Commissioner of Central Excise, Rajasthan [2007 (8) SCC 34 = 2007 (215) E.L.T. 327 (S.C.)] in the following terms :- 32. It is true that if the unamended section is to be made applicable, the ice cream pack of four litres would certainly be covered under Section 2-A. However, Rule 3 explains that provisions of Chapter II would apply to packages intended for retail sale and expression package wherever it occurs in the Chapter shall be construed accordingly. It is, therefore, clear that the package which was sold by the assessee could not be termed as retail package nor the sale thereof be termed as a retail sale and as such there was no requirement of mentioning the retail sale price on that package. All this has been completely missed in the order of the Tribunal. 33. On the other hand the package in question would certainly come within the definition of wholesale package as defined in Rule 2(x)(ii) as it conta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this can be squarely covered in the term servicing any industry . The word service is a noun of the verb to serve . This Court in Coal Mines Provident Fund Commr. v. Ramesh Chander Jha in a different context, observed as under : (SCC p.592, para 7) 7. The word service in Section 2(17)(h) must necessarily mean something more than being merely subject to the order of the Government or control of the Government. To serve means to perform function; do what is required for . 4.6 Reliance placed by the Revenue on the case of Federation of Hotel and Restaurant Associations of India [2018 (359) ELT 97 (SC)] also does not help the case as the issue involved in the said case was not with reference to the provisions of Section 4A of the Central Excise Act. In the said decision Hon ble Supreme Court has held that the sale of packaged mineral water by hotel to their clients is inclusive of the cost of bottle plus the services provided. Accordingly they have held that the sale at price higher than the affixed MRP is not in contravention of the provisions of Legal Metrology Act. Para 13 of the said decision reads as follows:- 13 . On a reading of the said Act and the Rule ..... X X X X Extracts X X X X X X X X Extracts X X X X
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