MRP Provisions applicability

[JSW CEMENTLIMITED]

Vide notification dated 14.05.2015, the Ministry of consumer Affairs, Food and Public Distribution has substituted the definition of Industrial Consumer and Institutional Consumer as under

bb) Industrial consumers means those consumers who buy packaged commodities directly from the manufacturer or from an Importer or from wholesale dealer for use by that industry and package shall have a declaration 'Not for Retail Sale'

bc) Institutional Consumers means institution who hires or avails of facilities or service in connection with transport, hotel, hospital or other organization which buys packaged commodities directly from a Manufacturer or from an importer or from wholesale dealer for use by that institution and the package shall have declaration 'Not for Retail Sale'

Rule 3(b) of Legal Metrology (packaged Commodities) Rules 2011 provides that provisions of LMA are not applicable in the case of Packaged commodities are meant for Industrial/Institutional Sales.

The proviso to Sl.No.52 of Notification No.12/2012-CE dated 17.03.2012 says that

'Provided that where the retail sale price of the goods are not required to be declared under the Legal Metrology (Packaged Commodities) Rules,2011and thus not declared, the duty shall be determined as in the case of goods cleared in other than packaged form'

With the above provision, in my opinion, if goods are sold to wholesale dealers who are specifically catering to the purchase needs of Institutional/Industrial Consumer, duty can be discharged @12.5% on transaction value as the goods are meant for industrial consumer only.

I would invite all the expert to give their valued opinion on the above issue as to whether goods can be sold to Wholesale dealer who are dealing with only industry by availing concessional rate of duty provided in Sl.No.52, first proviso of notification no.12/2012-CE dated 17.03.2012

AI Summary

Debate on MRP Rules: JSW Cement's query on concessional duty for industrial sales and Section 4 vs. 4A valuation. The discussion revolves around the applicability of MRP provisions under the Legal Metrology (Packaged Commodities) Rules, 2011, particularly concerning industrial and institutional consumers. JSW Cement Limited queries whether goods sold to wholesale dealers catering to these consumers can avail a concessional duty rate. The forum discusses the implications of labeling goods 'Not for Retail Sale' and the valuation of goods under Section 4 versus Section 4A of the Central Excise Act, 1944. Participants reference legal provisions and past judgments to conclude that sales to industrial consumers from depots should be valued under Section 4, as depots are considered extensions of the manufacturer.