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TMI Blog2005 (7) TMI 121X X X X Extracts X X X X X X X X Extracts X X X X ..... C.E., dated 1-3-2002 as amended by Notification No. 6/2003-C.E., dated 1-3-2003. The Notification benefit was available to Vanaspati, Bakery Shortening, Margarine and other edible preparations. However, in case the goods bear a brand name and are put up in unit containers and meant for retail sale, the exemption would not be available. The impugned goods, no doubt, bear a brand name and are put up in unit containers. However, there is a label indicating that the goods are meant for Bakery/Catering Industry use. It is further indicated that the impugned goods are 'not for retail sale'. The appellants contend that they are entitled for the exemption on the ground that the impugned goods are not meant for retail sale but, the Revenue, is of the view that the goods are sold to consumers and, therefore, the sale is a retail one. The appellants rely on a number of case laws. Revenue also relies on certain case laws. We have to examine all the case laws to arrive at a proper conclusion. M/s. Steel Complex Ltd. : In this case, the appellants declared a price, which is different from what is shown in the commercial invoice. The appellants supply steel products to Government Units. The a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, normally wholesalers do not sell directly to consumers. (a) The Hon'ble Supreme Court in the case of Collector of Central Excise, Madras v. Abex Rubber Co. - 1998 (99) E.L.T. 489 (S.C.) held that there is no presumption in law that a sale to an industrial consumer must be in bulk and the price charged must be in wholesale price. Any such inference will have to be drawn from the facts of the case. In the same decision, it has been observed that, "There is no dispute that bulk sale to a single consumer may constitute wholesale sale and the price for such sales should be taken as the normal price basis for determining the assessable value of the goods." From the above observations, it is evident that in order to decide whether a transaction is a wholesale transaction or retail transaction, one has to examine the facts of the case. During the hearing, an impression was created by the learned Advocate for M/s. Hindustan Lever Ltd., that in view of the Abex Rubber decision, the quantity of sale is irrelevant to decide the question of wholesale or retail. We are afraid that this is not correct. There cannot be a general proposition that sale to Industrial consumer is wholesale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... act that the element of direct re-sale (of tyres, tubes purchased from MRF) may be absent in the case of such buyers would not detract from the position that such purchases (and MRF sales to them) are not purchases (sales) in retail." We infer from the above observations, that quantum of sale is very relevant. The erstwhile Section 4(4)(e) defines 'wholesale trade' as follows : '"Wholesale trade" means sales to dealers, industrial consumers, Government, local authorities and other buyers, who or which purchase their requirements otherwise than in retail'. (emphasis supplied) In other words, any supply to dealers, industrial consumers, Government, local authorities can be considered as wholesale trade provided they do not purchase in retail quantity. The purchase must be otherwise than in retail. The fact of a sale being wholesale does not depend on to whom the goods are sold but how much is sold. (d) In the case of D.C.W. Ltd. v. Collector of Central Excise - 1992 (62) E.L.T. 153 (Tribunal), the point that Industrial Consumers are a class of buyers is emphasised. Section 2(k) of the Central Excise Act is reproduced herein below : "2(k) "wholesale dealer" means ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssed. In the case of CC, Mumbai v. Jaysons Hard Metals P. Ltd. - 2003 (155) E.L.T. 193 (Tri. - Mum.), it has been held that goods will not become consumer goods merely because of being packed in a particular manner. In the case of Telco Ltd. v. CC, Mumbai - 2003 (158) E.L.T. 621 (Tri.), it has been held that packing is not determinative of whether goods are for industrial application or consumer goods. The learned Advocate relied on these case laws for contending that mere packing is not an indication for determining the nature of the goods. In the case of Hercules Rubber Co. v. CCE - 1984 (18) E.L.T. 479 (T), the distinction between the industrial consumer and individual consumer has been clearly brought out. "The distinction between an industrial consumer and an individual consumer is not one without difference. While there can be sale by the manufacturer in retail in terms of Rule 6 of the Central Excise (Valuation) Rules, 1975, such a sale cannot be to an industrial consumer but to an individual customer or consumer for his personal consumption and not for industrial use. The industrial consumers are a class apart from individual consumers insofar as valuation of excisable go ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ail sale. Separate sale transactions have been entered into with each individual consumer, at the price negotiated and with modifications supply of extra accessories as desired by each one of them. These are the major criteria which exist in the retail transactions and are generally absent in the wholesale trade, where general requirements of the consumers at large, as against specific requirements of each individual consumer, are considered. The sale transactions, therefore, provide clear indication of the sales being in the nature of retail sale. Some of the customers have purchased more than one truck, but merely on that count, the sale cannot be construed to be in the nature of wholesale trade. In such cases also the essence of the transactions remain to be of the retail nature." (i) In the same decision at Para 9.7 it has been observed "9.7. From the decisions referred to above, as also considering the definition of the word "whole-sale trade" given in Section 4(4)(e) of the Act, the wholesale trade has to be understood as the one, where the element of further sale to other persons is involved, or where the purchase is by those specified, namely, industrial consume ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... industrial consumers cannot be regarded as wholesale dealers." 6. A very careful examination of all the case laws cited indicate that each case has been decided based on the facts of that case. In other words we do not really find any contradiction or inconsistencies in the light of the facts of each case. However, while examining the definition of wholesale trade in the erstwhile Section 4(4)(e) and also the definition of Wholesale trader in Section 2(k) of the Central Excise Act, 1944, the following picture emerges. Wholesale transaction includes not only sale for purposes for trade but also for purposes of manufacture and hence sale to industrial consumer in bulk is a Wholesale trade and cannot be considered as retail sale. Further when the goods are supplied directly to a consumer the sale transaction is retail. But the quantum is important. Under certain circumstances an individual consumer may purchase in huge quantities, say, for a wedding. On that count, we cannot hold that the transaction is retail. There is always a difference between individual consumer and industrial consumer as brought out in the Hercules Rubber Co. case (mentioned supra). An industrial consumer con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... epartment purchases a photocopier it may be either one, two or three. It cannot be in very huge quantities. But in the present case, the appellant company supplied steel to different Government companies in bulk. The case of the appellants is that the steel purchased by the Government companies is not for resale but only for their own consumption. According to the Appellants, the nature of their sales is retail, as their buyers viz., Government units do not resell but use the goods for construction purposes. The learned Advocate maintains sphinx like silence with regard to the quantum. But the adjudicating authority, has observed that, "the main factor which decides whether the trade is wholesale or not is the quantum of the consignments sold. It is seen that majority of sale consignments weigh about 10 MTs and this cannot be termed as retail sale." Further the appellate authority in his findings has stated that, "there is no merit in their contention that their sales are in retail. All the sales were to Government institution in bigger lots for their own commercial use has been distinct from an individual consumer buying goods for personal or family use. Moreover the appellant has ..... X X X X Extracts X X X X X X X X Extracts X X X X
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