Tribunal: Bulk ice cream supply to hotels not retail falls under Central Excise Act

The Tribunal held that ice creams supplied in bulk to hotels/restaurants not meant for retail sale are not governed by the Packaged Commodity Rules, 1977. The assessment should be done under Section 4 of the Central Excise Act, 1944, as clarified by the Department and supported by Circular No. 625/16/2002-CX. In this case, duty was correctly paid under Section 4, leading to the appeal being allowed and the impugned order set aside. The decision aligned with previous Tribunal rulings and the Department's clarification.

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Issues involved: Interpretation of Packaged Commodity Rules, 1977 u/s Section 4 and Section 4A of the Central Excise Act, 1944.

Interpretation of Packaged Commodity Rules, 1977:
The dispute centered around the assessment of catering packs of ice creams supplied in different sizes. The appellants argued that these packs were not subject to the Packaged Commodity Rules, 1977, and should be assessed under Section 4 of the Central Excise Act, 1944. However, the Adjudicating Commissioner, citing precedents, held that the goods should be assessed under Section 4A of the Central Excise Act, 1944.

Clarification by the Department and Tribunal's Decision:
Subsequently, the Department clarified that ice creams supplied in bulk to hotels/restaurants not meant for retail sale are not governed by the Packaged Commodity Rules, 1977. This clarification was supported by Circular No. 625/16/2002-CX. dated 28.02.2002. The Tribunal, in a related case, also considered this Circular and the earlier order, and concluded that assessment should be done under Section 4 of the Central Excise Act, 1944. In the specific case at hand, it was noted that the duty had been paid under Section 4 on the sale price to the catering establishments and hotels/restaurants. Considering the Department's Circular and the Tribunal's judgment, it was held that the duty had been correctly paid under Section 4, leading to the setting aside of the impugned order and allowing the appeal.

Conclusion:
The Tribunal's decision was based on the interpretation of the Packaged Commodity Rules, 1977, and the correct assessment under Section 4 of the Central Excise Act, 1944, in line with the Department's clarification and previous Tribunal rulings.

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