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TMI Blog2024 (1) TMI 818X X X X Extracts X X X X X X X X Extracts X X X X ..... .1C of Notification No.4/2006-CE dated 1.3.2006 as amended. The Tribunal in the case of GRASIM INDUSTRIES LTD. (UNIT-I) VERSUS COMMISSIONER OF C. EX., TRICHY [ 2008 (10) TMI 462 - CESTAT, CHENNAI] has discussed in detail the issue as to whether R.S.P has to be affixed on cement bags of 50 kgs and held that We have found favour with the assessee s case in view of the clarification issued by the CBEC, which is to the effect that no RSP requires to be printed on the goods sold to industrial/institutional consumers as defined under the rules framed under the Standards of Weights and Measures Act and that such goods would be covered under Sl. No. 1B or 1C of Notification No. 4/2006-C.E. by virtue of the Second Proviso to the Explanation to Sl. No. 1C of the Notification as amended. Thus, the allegation in the SCN as to whether the appellant has cleared cement to industrial / institutional consumers is too vague to be the basis for confirmation of demand. Further, adjudication after such lapse of time alleging that the appellant has not furnished evidences to show that the clearances of such 50 kg. bags have been made only to industrial / institutional consumers, is not justified. The de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reference : Sl.No. Chapter heading or sub-heading or tariff item of the First Schedule Description of excisable goods Rate (1) (2) (3) (4) 1. 253329 All goods, manufactured in a mini cement plant cleared in packaged form- i. Of retail sale price not exceeding Rs.190 per 50 kg bag equivalent retail sale price not exceeding Rs.3800. ii. Of retail sale price exceeding Rs.190 per 50 kg bag or of per tonne equivalent retail sale price exceeding Rs.3800 Rs.220 /PMT Rs.370/PMT 1A 2523 29 All goods, whether or not manufactured in a mini cement plant, not covered in S.No.1 and cleared in packaged form o retail sale price not exceeding Rs.190 per 50 kg bag or of per tonne equivalent retail sale price not exceeding Rs.3800; Rs.350 / PMT 1B 2523 29 All goods, manufactured in a mini cement plant, other than those cleared in packaged form; Rs.250/PMT 1C 2523 29 All goods, whether or not manufactured in a mini cement plant, not covered in S.No.1B, other than those cleared in packaged form Rs.400/PMT Explanation. - 1………………………………………………&h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... izer sold in bags upto 50 Kg; and (b) packed commodities meant for Industrial consumers and Institutional consumers. Explanation : For the purpose of this Rule - (a) Institutional Consumer - Means those consumers who buy packaged commodities directly from the manufacturers / packers for service industry like transportation (including airways, railways,) hotel or any other similar service industry. (b)Industrial Consumer - Means those consumers who buy packaged commodities directly from the manufacturers/ packers for using the product in their industry for production etc." 4. The department was of the view that as per Rule 2A, the cement cleared in packaged form upto 50 Kg., even though cleared to institutional or industrial consumers, would get covered under the provisions of Chapter II of SWM (PC) Rules, 1977 and therefore the M.R.P (R.S.P) has to be declared mandatorily on the cement bags. 5. On verification it was noticed that the appellant had cleared large quantity of cement packed in 50 kg. bags to industrial / institutional consumers during the period from December 2007 to June 2017 and availed the concessional rate under Sl.No.1C of the Notification. So also, they ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,113/- 3 SCN No.47/2009 dt. 02.06.2009 May, 2008 to July 2008 V/15/25/48/2009-C.Ex. Adj. III Rs.39,68,187/- 4 SCN No.65/2009 dt. 03.09.2009 August 2008 to June, 2009 V/15/25/89/2009-C.Ex. Adj. III Rs.2,06,89,369/- 5 SCN No.50/2010 dt. 28.07.2010 July, 2009 to December 2009 V/15/25/45/2010- C.Ex. Adj. III Rs.1,52,40,081/- 6 SCN No.03/2011 dt. 02.02.2011 January 2010 to October 2010 V/15/25/04/2011- C.Ex. Adj. III Rs.1,61,62,822/- 7 SCN No.65/2011 dt. 02.02.2011 November 2010 to February 2011 V/15/25/65/2011- C.Ex. Adj. Rs.59,86,141/- 8 SCN No.10/2012 dt. 23.03.2012 March 2011 to August 2011 V/15/25/08/2011- C.Ex. Adj. Rs.75,06,961/- 9 SCN No.32/2012 dt. 04.09.2012 September, 2011 to March, 2012 (01.03.2012 to 16.03.2012) V/15/25/53/2012- C.Ex. Adj. Rs.1,90,81,908/- 10 C.No.IV/16/55/2013-Adj. dt. 08.04.2013 (17.03.2012 to 31.03.2012) IV/16/55/2013-Adj. Rs.3,22,623/- 11 SCN No.31/2013 dt. 29.04.2013 April 2012 to December 2012 V/15/25/30/2013-C.EX. Adj. III Rs.1,25,87,142/- 12 SOD No.5/2014 dt.27/1/2014 January 2013 to September 2013 V/15/25/01/2014-C.EX.Adj. III Rs.1,73,56,256/- 13 SOD No.60/2014(CE) dt. 30/10/2014 October 2013 to March 2014 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er, the SCNs had proposed penalty under Rule 25 of the Central Excise Rules 2002, which was dropped in the Impugned order. As on date, there is no revenue appeal filed against these findings in the impugned order and hence the findings to that extent have attained finality. A. The contention that clauses (a) and (b) of Rule 2A of PC Rules 1977 and Rule 3 of PC Rules 2011 are to be read in conjunction is not valid. A.1. The SCNs alleged that clauses (a) and (b) of Rule 2A / Rule 3 of PC Rules were required to be read in conjunction as both the clauses are conjoined with the word 'and' and thus, both the clauses are required to be satisfied cumulatively. Therefore appellant was not eligible for benefit of notification. The contention was confirmed in the impugned order in paragraph 15. A.2. The SCNs analysed all the invoices and has recorded so in the SCNs itself. Though it is admitted that what is cleared is cement in bags of upto 50 kgs and that these are indeed sold to industrial and institutional consumers, the only case made out in the SCNs for proposing the demand is that, both the conditions as provided in clauses (a) and (b) under Rule 2A of the 1977 Rules are to be fulfil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... one of the conditions is not satisfied - namely, that the cement was cleared in bags of 50Kgs, whereas the exemption in the 1977 Rules and the 2011 Rules was for cement cleared in bags above 50 Kgs. However, this is incorrect. The SCNs does not dispute the fact that cements were indeed meant for clearances to institutional and industrial consumers. In fact, the SCNs categorically state that though the clearances were made to institutional/industrial consumers, since clauses (a) and (b) of Rule 2A were separated by 'and', both conditions had to be satisfied. The SCNs do not bring out any evidence or any instances after perusal of invoices where the department has shown that the claim of sale to institutional and industrial consumer is incorrect. B.3. Further, it is submitted that only a passing reference has been made in SCNs that "on perusal of invoice it is not known exactly whether they are institutional or industrial consumers or not". However, this stray sentence is at odds with the narration of facts throughout the SCNs and the impugned order has latched onto this averment and has ignored the other admitted facts on record. Such selective adjudication reflects bias and preju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tech Cement Ltd. vs. CCE - 2018 (8) TMI 458 - CESTAT AHMEDABAD C.4. In view of the above, it is submitted that there was no statutory requirement for the appellants to declare MRP on cement bags of 50 kg. Therefore, the ground alleged in SCNs and confirmed in para 15 of the impugned order that appellants were statutorily mandated to affix MRP on such cement bags no longer survives. The finding in the impugned order that the appellants have not produced invoices for verification is contrary to the observation made in the SCNs. C.5. It is submitted that the findings in paragraph 14 of the impugned order that the Appellant have failed to produce necessary documents to prove supply to institutional customers is contrary to the observation made in SCNs. C.6. It is submitted that from paragraph 11 of the SCNs, it is clear the invoices with respect to clearance of cement bags to industrial/ institutional consumers were produced by the Appellant and the same were verified. Whereas the impugned Order has confirmed the demand in the impugned order for non-production of necessary documents. C.7. The Respondent cannot blow hot and cold as the invoices pertaining to clearance of cement bag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... placed in the Callbook. D.5. The Appellant had duly filed their replies to the SCNs in a prompt manner, adducing all relevant evidence. When no personal hearing was conducted and when no orders were issued, the Appellant believed that the demands had been dropped. The Impugned Order states for the first time that the SCNs had been placed in the call book for 14 years. The Appellant was not put to notice at any stage prior, that the SCNs were being placed in the call book. D.6. In Siddhi Vinayaka Syntex Pvt Ltd vs UOI- 2017 (352) ELT 455 (Guj), where a challenge to the very concept of transferring cases to the call book was upheld by the Hon'ble High Court of Gujarat. The Hon'ble Gujarat High Court analysed the power of the CBEC (as it then was) to issue instructions under Section 37B of the Excise Act and the powers of adjudication under Section 11A of the Excise Act to conclude that the concept of call book, contrary to the Excise Act and such instructions are beyond the scope of the authority of the C.B.E. & C. A Revenue Appeal against this judgment was disposed of on account of monetary limits in UOI v. Siddhi Vinayak Syntex Pvt. Ltd. [2022 (379) E.L.T. 553 (S.C.)]. D.7. Furt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellant has failed to produce necessary documents to prove that the cement was supplied to industrial / institutional consumers. 11. The matter was kept in the call book only because the appeal was pending before the Hon'ble Supreme Court. The appellant cannot fall upon delay in adjudication as they are bound to maintain the records. It is submitted that after verification, the original authority has given relief in respect of clearances meant for their own consumption in view of the Supreme Court order. The Supreme Court in the appellant's own case on the very same issue vide judgment in C.A. 6227/2009 dt. 14.9.2019 had held that the wherever the clearances are not made to industrial or institutional consumers, the concession at Sl.No.1C of notification will not be available. It is therefore the burden of the appellant to establish that the clearances were made to institutional / industrial consumers. The appellant having failed to establish with documentary evidence, the demand and interest confirmed is legal and proper. The adjudicating authority has given relief of not imposing any penalty as the issue is of interpretational in nature. It is submitted that impugned order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oviso to the Explanation reads thus :- "Provided also that where the retail sale price of the goods are not required to be declared under the Standards of Weights and Measures (Packaged Commodities) Rules, 1977, and thus not declared, the duty shall be determined as is in the case of goods cleared in other than packaged form". 3. Before the adjudicating authority, the assessee relied on a clarificatory letter issued by the CBEC, in F. No. 124/02/2008-CX-3, dated 12-6-2008, wherein it was clarified that, in certain factual situations mentioned therein, sale of goods even in packaged form would not attract the provisions of the Standards of Weights and Measures Act, 1976 or of the Rules made thereunder. The letter particularly clarified as under :- "No RSP required to be printed on the goods in respect of above mentioned categories of sale. Hence they will be covered under Sl. No. 1B or 1C of the Notification 4/2006-C.E., by virtue of second proviso to Explanation II in the Notification 4/2006 dated 1-3-2006 as amended." On the above basis, the assessee argued that the cement in 50 Kg. packs cleared by them to industrial/institutional consumers during the period of dispute at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ause notices were taken up for adjudication. As mentioned above, the adjudicating authority though took note of the decision of the Hon'ble Supreme Court has thereafter confirmed the demand on the ground that appellant has not established that the cement was supplied to industrial / institutional consumers. It requires to be stated that in the SCN there is clear admission by the department that demand of duty is made on sale and clearances made to industrial / institutional consumers. The relevant paras of show cause in this regard is noteworthy of reproduction as under : "4. The assesses have also cleared packed cement in bags, each containing 50 kgs. of cement, without affixing Retail Sale Price (RSP) on the packages to industrial / institutional consumers, for which the assesses have paid excise duty at concessional rate of applicable for loose/unpacked cement under Sl.o.1C of Notification No.4/2006-CE dated 1.3.2006 as amended i.e. at the rate of Rs.400/M.Ton upto 28.2.2008. 5. Consequent to changes made in the Union Budget, 2007, the effective rates of excise duty for cement have been revised vide Notification No.4/2007-CE dated 01.3.207 by amending Notification No.4/2006- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... kages. 10. Further, it appears that the assesses have cleared packed cement in bags of 50 kgs. each for own use within the factory premises for various civil work undertaken by them. The said clearance does not fall under the scope of the term 'industrial consumer' since the said goods have not been used / utilised for manufacture of any excisable product. Neither are they covered under the term 'institutional buyer' since no service activity is undertaken at the factory premises. Hence these clearances do not satisfy both the above said conditions. It also appears that on perusal of the invoices concerned for which the assesses claimed exemption in respect of other industrial consumers and institutional consumers it is not known exactly whether they are institutional or industrial consumers and hence, the said clearances do not fall under the erm "industrial consumers and institutional consumers" and hence, the two conditions are not satisfied. Hence, the assessees are liable for penal actin under Rule 25 of Central Excise Rules, 2002 inasmuch as they have contravened the provisions of Rules 4, 6, 8, 10 & 12 of the Central Excise Rules, 2002. The applicable rate of interest is a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... invoices issued. The SCN should contain sufficient information to facilitate in giving a reply / defence and also for understanding the dispute at the time of adjudication. The adjudication cannot be founded on an incomplete or insignificant averment in the SCN. 16. Further, it has to be noted that 18 SCNs for the period from December 2007 to June 2017 have been taken up for adjudication together and the order is passed on 30.11.2021. There is considerable delay in passing the adjudication order after the issuance of the show cause notices. Indeed, if the appellant had been intimated to preserve the records in regard to these show cause notices, the same would have been available to the appellant for the belated adjudication. When the main issue alleged in the SCN that appellant has to satisfy both the conditions in Rule 2A for not affixing RSP and claim eligibility of the benefit under Sl.1C of Notification No.4/2006 is settled in favour of the assessee the demand cannot be later confirmed on a vague allegation in the SCN. When the department was aware that the main issue was pending before the Hon'ble Supreme Court, they ought to have done verification of the invoices for subseq ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that such goods would be covered under SI. No. 1B or 1C of Notification No. 4/2006-C.E., by virtue of the Second Proviso to the Explanation to SI. No. 1C of the Notification as amended. The Board's clarification squarely covers the case in favour of the assessee." Further, in the case of Mysore Cement Ltd. - 2010 (249) E.L.T. 398, this Tribunal held that construction industry is a service industry and benefit claimed by the appellants under the aforesaid Notifications shall be admissible. The said decision was upheld by the Hon'ble High Court of Karnataka (supra). Again in the case of India Cement Ltd. - 2009-TIOL-1464-CESTAT-MAD = 2009 (235) E.L.T. 145 (T), it was held that cement cleared to industrial/institutional consumers in 50 kg bags are eligible for the benefit of Notification No. 4/2006 under Sr. No. 1C. Thus it can be seen that this Tribunal as also the High Court have been consistently holding that institutional/industrial consumers are eligible for the benefit of Notification No. 4/2006 and Notification No. 12/2012. 6. In this view of the matter, we are of the considered view that the impugned demands are not sustainable in law. Accordingly, we set aside the same a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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