2008 (10) TMI 462 - AT - Central Excise

Appeal allowed; demand and penalty set aside as cement sold to industrial/institutional consumers covered by Notification No. 4/2006-C.E. Sl.1B/1C

CESTAT (Chennai) AT allowed the appellant's appeal, setting aside the impugned demand and penalty. The tribunal found the cement plant was not a mini ... Demand of duty - denial of benefits under Notification No. 4/2006-C.E - penalty under Notification No. 4/2006-C.E. for cement cleared in 50 Kg. packs - Effect of clarificatory letter issued by the CBEC - Admittedly, the appellant’s cement plant is not a ‘mini cement plant’ defined under the Explanation to Sl. No. 1C of the Notification and consequently the subject goods were not covered under Sl. No. 1B of the Notification. - Held that:- As rightly pointed out by the learned counsel, as the benefit offered under the Notification pertains to goods cleared to industrial/institutional consumers and as this aspect was overlooked by the Legal Metrology expert as also by the learned Commissioner, the impugned order is liable to be set aside. The Board’s clarification on the relevant question was wrongly by-passed by the adjudicating authority. 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. The Board’s clarification squarely covers the case in favour of the assessee. Issues: Whether cement supplied in 50 Kg. packs to industrial/institutional consumers attracts the concessional rate under Notification No. 4/2006-C.E. (Sl. No. 1C) by virtue of the Second Proviso to the Explanation where Retail Sale Price (RSP) printing is not required under the Standards of Weights and Measures Rules.Analysis: The question turns on whether packaged cement cleared to industrial/institutional consumers is exempt from the RSP printing requirement under the Standards of Weights and Measures (Packaged Commodities) Rules, 1977 and thus falls within Sl. No. 1C of Notification No. 4/2006-C.E. A contemporaneous clarification issued by the Central Board of Excise & Customs states that where RSP is not required to be printed for specified categories of sale, such goods are covered under Sl. No. 1B or 1C by virtue of the Second Proviso to the Explanation. The adjudicating authority relied on an opinion of the Legal Metrology Department that did not take into account that the clearances were to industrial/institutional consumers and hence overlooked the applicability of the Second Proviso and the Board's clarification. Applying the statutory framework and the administrative clarification to the factual finding that the clearances were to industrial/institutional consumers leads to coverage under Sl. No. 1C.Conclusion: Benefit of Notification No. 4/2006-C.E. (Sl. No. 1C) is admissible for cement in 50 Kg. packs cleared to industrial/institutional consumers; the excise demand and penalty are vacated (decision in favour of the assessee).Ratio Decidendi: Where RSP printing is not required under the Standards of Weights and Measures Rules for sales to industrial/institutional consumers, such packaged goods fall within the concessional entry of Notification No. 4/2006-C.E. by operation of the Second Proviso to the Explanation, and an administrative clarification to that effect is binding for adjudication of the concessional rate.