2016 (11) TMI 1084 - AT - Central Excise

Tribunal upholds exemption for declaring retail selling price under Weights & Measures Rules

Commissioner of Central Excise Nagpur Versus Sony Polymers Pvt Ltd.

The Tribunal upheld the decision to set aside the tax demand on the assessee, concluding that the goods were exempt from declaring retail selling price ... Valuation - bulk packs - secondary packages - multi-piece packing - declaration of RSP - content of packaged commodity less than ten grams and ten mililitres - Standards of Weights & Measures (Packaged Commodity) Rules, 1977 - Held that: - there is no finding that the secondary packing containing the ‘glue sticks’ and ‘correction pens’ had retail selling price declared on them. Nor is there any allegation that the said goods were displayed for sale to the ultimate consumer in the secondary packing. Consequently, the packages are not ‘multi-piece packages’ as it was, apparently, not the intent of the manufacturer to sell the goods to the ultimate consumer in the secondary packing. And as retail selling price is not declared on the secondary packages, section 4A of Central Excise Act, 1944 is not applicable. The pieces inside the secondary packing are, apparently, intended for sale only as individual pieces at the last point of sale to the ultimate consumer. Having considered the argument of Revenue that the secondary packing containing individual packaged commodities are ‘multi-piece’ packing and found them to be not so but packing not intended for sale to the ultimate consumer and having accepted the claim for exemption from ambit of Standards of Weights and Measures (Packaged Commodities) Rules, 1977 owing to the individual packages being less than the prescribed threshold, we uphold the impugned order and dismiss the appeal of Revenue. Cross-objection is also disposed off. Issues Involved:1. Applicability of Section 4A of the Central Excise Act, 1944 for valuation of excisable goods.2. Compliance with Standards of Weights and Measures (Packaged Commodities) Rules, 1977.3. Exemption applicability under Rule 34 of the Standards of Weights and Measures (Packaged Commodities) Rules, 1977.4. Determination of whether the goods are 'multi-piece packages' or 'wholesale packages.'5. Validity and application of notification no. 13/2002-CE (NT) dated 1st March 2002.Detailed Analysis:1. Applicability of Section 4A of the Central Excise Act, 1944:The dispute centers on whether the valuation of 'glue sticks' and 'correction pens' should be under Section 4 or Section 4A of the Central Excise Act, 1944. The assessee contended that their goods did not require the declaration of retail selling price on the packages as they were below the threshold specified in Rule 34 of the Standards of Weights and Measures (Packaged Commodities) Rules, 1977. The Revenue argued that the goods were cleared in 'multi-piece packages,' which necessitated compliance with Section 4A.2. Compliance with Standards of Weights and Measures (Packaged Commodities) Rules, 1977:The Tribunal examined whether the goods in question were subject to the Standards of Weights and Measures (Packaged Commodities) Rules, 1977. The Rules require certain declarations on packages, including retail selling price, for consumer protection. The Tribunal noted that the primary focus of these rules is to ensure that consumers are not misled regarding the quantity and price of pre-packaged goods.3. Exemption Applicability under Rule 34 of the Standards of Weights and Measures (Packaged Commodities) Rules, 1977:Rule 34 exempts packages containing commodities of net weight or measure of twenty grams or twenty millilitres or less from the requirement to declare retail sale price. The Tribunal found that the 'glue sticks' and 'correction pens' in question were within this exemption as they contained less than ten grams and ten millilitres respectively. Therefore, the goods were not required to declare retail selling price, and Section 4A did not apply.4. Determination of Whether the Goods are 'Multi-Piece Packages' or 'Wholesale Packages':The Tribunal differentiated between 'multi-piece packages' and 'wholesale packages.' According to Rule 17, multi-piece packages must declare the number of pieces and the retail sale price. However, the Tribunal found that the secondary packing of 'glue sticks' and 'correction pens' did not declare retail selling price and was not intended for sale to the ultimate consumer. Thus, they were considered 'wholesale packages' and not subject to the same requirements as 'multi-piece packages.'5. Validity and Application of Notification No. 13/2002-CE (NT) Dated 1st March 2002:The Revenue's appeal was based on the assertion that notification no. 13/2002-CE (NT) mandated assessment under Section 4A for correction fluids and prepared glue. The Tribunal clarified that Section 4A applies only when the Standards of Weights and Measures (Packaged Commodities) Rules, 1977 require the declaration of retail selling price. Since the goods were exempt under Rule 34, the notification did not apply. The Tribunal emphasized that the notification must align with the statutory requirements of the Standards of Weights and Measures Act, 1976 and its rules.Conclusion:The Tribunal upheld the first appellate authority's decision to set aside the tax demand on the assessee. It concluded that the goods were exempt from the requirement to declare retail selling price under Rule 34 of the Standards of Weights and Measures (Packaged Commodities) Rules, 1977, and thus Section 4A of the Central Excise Act, 1944 did not apply. The Tribunal dismissed the Revenue's appeal and disposed of the cross-objection filed by the respondent.