2012 (9) TMI 2 - AT - Central Excise

Tribunal Upholds Benefit Decision under Packaging Rules, Emphasizes Need for Concrete Proof

The Appellate Tribunal CESTAT, New Delhi upheld the Commissioner (Appeals)' decision granting the respondent benefit under Rule 34 of the Standards of ... Denial of benefit of Rule 34 of Standards of Weight and Measures Rules, 1977 – Held that:- Goods in question are sold directly to the industrial consumer as well as sold through a network of the dealers and products are packed in unit size with detail description of the product and with specific mention on the packing that the packed material is meant for exclusive use of the industries as raw material - In order to deny the benefit of the said provision of law comprised under Rule 34 of the said rules, it was necessary for the department to produce some evidence on record to show that the goods in question were either sold or meant for retail sale or for sale to the customers other than industrial units. In the absence of such evidence on record, no fault can be found with the findings arrived at by the Commissioner (Appeals) regarding entitlement of benefit to the respondent in relation to the provision of law comprised under Rule 34 of the said rules Issues:Interpretation of Rule 34 of Standards of Weight and Measures (Packaged Commodities) Rules, 1977 regarding the benefit application to packaged commodities for industrial use.Analysis:The judgment by the Appellate Tribunal CESTAT, New Delhi involved the interpretation of Rule 34 of the Standards of Weight and Measures (Packaged Commodities) Rules, 1977, specifically focusing on the benefit application to commodities packaged for industrial use. The Commissioner (Appeals) had allowed the appeal filed by the respondent, granting them the benefit under Rule 34, which was denied by the department. The Commissioner relied on a previous decision related to the same respondent, supporting the grant of benefit.The Tribunal noted that Rule 34 exempts certain packaged commodities from the rules if marketed exclusively for industrial use, with specific exclusions. The Commissioner found that the goods in question were sold directly to industrial consumers and through dealers, clearly labeled for exclusive industrial use. There was no evidence of sales to retail consumers or non-industrial customers. The Tribunal emphasized that for the department to deny the benefit under Rule 34, evidence must show sales to non-industrial customers, which was lacking in this case.Since no other grounds for challenge were presented, the Tribunal found no reason to interfere with the Commissioner's decision and dismissed the appeals. The judgment underscores the importance of clear evidence to support the denial of benefits under specific rules, highlighting the need for concrete proof of non-compliance to justify withholding entitlements under the law.