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

Industrial consumer exemption allows transaction-value valuation where goods bear "Not for Retail Sale" and serve industrial use.
Packaged cement destined for industrial or institutional consumers and labelled "Not for Retail Sale" falls within the Legal Metrology exemption, and clearances from depots (as places of removal) intended for such consumers may be valued on transaction value under Section 4 rather than by retail-sale-price valuation.