Retail sale price not required for cement sold to industrial and institutional consumers, enabling exemption treatment under duty notifications.

Cement cleared in 50 kg bags directly to builders, developers and ready mix concrete manufacturers was treated as supply to institutional or industrial consumers, so retail sale price declaration was not required under the packaged commodities rules. The two exclusions for goods above the specified weight and goods meant for industrial or institutional consumers were read disjunctively. Ready mix concrete manufacturers were treated as industrial consumers because the cement was used in production, while builders and developers were treated as institutional consumers because construction activity was regarded as a service activity. On that basis, the third proviso to the relevant exemption entries applied and the goods were treated as cleared otherwise than in packaged form for duty purposes.

---

---

Issues: Whether cement cleared in 50 kg bags to builders, developers and ready mix concrete manufacturers qualified as supplies to industrial or institutional consumers so that declaration of retail sale price was not required and the concessional duty entries under the relevant exemption notifications were available.

Analysis: The exclusion in Rule 2A of the Standards of Weights and Measures (Packaged Commodities) Rules, 1977 and Rule 3 of the Legal Metrology (Packaged Commodities) Rules, 2011 covered both packaged commodities above the specified weight and packaged commodities meant for industrial or institutional consumers. The two parts were read disjunctively. Ready mix concrete manufacturers were industrial consumers because the cement was used in production, while builders and developers were treated as institutional consumers because construction activity was regarded as a service activity. Once declaration of retail sale price was not required under the packaged commodities rules, the third proviso to the relevant entries in Notification No. 4/2006-CE dated 01.03.2006 and Notification No. 12/2012-CE dated 17.03.2012 applied, treating the goods as cleared otherwise than in packaged form for duty purposes.

Conclusion: The cement clearances to such buyers were eligible for the concessional notifications and the duty demands could not be sustained.

Ratio Decidendi: Where cement in 50 kg bags is sold directly to industrial or institutional consumers for use in production or for service activity, retail sale price declaration is not required and the exemption notification applicable to goods where such declaration is not required governs the duty liability.

---