Cement in 50kg bags to industrial consumers gets exemption without Retail Sale Price printing requirement

CESTAT Chennai held that cement supplied to industrial/institutional consumers in 50 kg bags is eligible for exemption under Sl.No.1C of Notification No.4/2006-CE without requiring Retail Sale Price printing on bags. Following SC precedent in Commissioner of Central Excise v. Madras Cements Ltd., the Tribunal ruled that Standards of Weights and Measures Rules do not mandate RSP affixation on cement bags sold to industrial/institutional consumers. The demand confirmation was set aside as allegations were too vague and adjudication after significant time lapse without proper evidence was unjustified. Appeal allowed.

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Issues Involved:
1. Whether Chapter II of SWM (PC) Rules, 1977 / PC Rules of 2011 require affixation of MRP / RSP on cement bags of 50 kgs. when cleared to industrial / institutional consumers.
2. Whether the exemption from duty at Sl.No.1C of Notification 4/2006 as amended is available for the goods cleared by the appellant.

Summary:

Issue 1: Affixation of MRP / RSP
The department contended that the appellant must affix Retail Sale Price (RSP) on 50 kg cement bags as per Rule 2A of the SWM (PC) Rules, 1977, and thus, they are not eligible for exemption under Sl.No.1C of Notification No.4/2006. The appellant argued that they cleared cement to industrial/institutional consumers, which does not require RSP as per the third proviso to Explanation (2) appended to Sl.No.1C of Notification No.4/2007-CE dated 1.3.2007. The Tribunal referred to the Hon'ble Supreme Court's decision in Commissioner Vs Madras Cements Ltd. - 2020 (371) ELT A42 (SC), which upheld that RSP is not required on cement bags of 50 kgs cleared to industrial/institutional consumers, making them eligible for the exemption under Sl.No.1C of Notification No.4/2006-CE.

Issue 2: Eligibility for Exemption
The adjudicating authority initially confirmed the demand, stating the appellant failed to prove that the clearances were to industrial/institutional consumers. However, the show cause notices (SCNs) admitted that the cement was cleared to industrial/institutional consumers but argued that both conditions under Rule 2A must be satisfied cumulatively. The Tribunal found the SCNs vague, lacking specific evidence or instances of retail sales. The prolonged delay in adjudication (almost 15 years) and the failure to notify the appellant about the SCNs being placed in the call book were also noted. The Tribunal held that the appellant's clearances to industrial/institutional consumers were eligible for the concessional rate under Sl.No.1C of Notification No.4/2006-CE, as supported by various precedents and the Hon'ble Supreme Court's decision.

Conclusion:
The Tribunal set aside the demand, stating the allegations in the SCNs were too vague and the delay in adjudication was unjustified. The appeal was allowed with consequential relief.

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