TaxTMI 
TaxTMI 
2009 (4) TMI 667
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....ve contravened the provision of Section 4 by resorting to valuation under Section 4A. Inasmuch as DGS & D insistence upon assessee to adopt Section 4A valuation is not viable in the provisions of Central Excise law. Hence, it was concluded that the, assessee was liable to pay differential duty under the provisions of Section 11A of Central Excise Act, 1944. The show cause notice was adjudicated by the Adjudicating Authority and the Adjudicating Authority came to the conclusion that the respondent had contravened the provisions of Central Excise Act. Coming to such a conclusion, he confirmed the demand, imposed equivalent amount of penalty and directed the respondent to pay interest. Aggrieved by such an order, the respondent filed an appeal before the learned Commissioner (A). The learned Commissioner (A) after considering the submissions made by the respondent before him set aside the Order-in-Original and allowed the appeal. Hence, revenue is in appeal. 3. Learned SDR appearing on behalf of the revenue would submit that the respondent has got unintended benefit by claiming the abatement from DGS & D rate contract. She would submit that the department's grounds of appeal a....
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.... profit margin, expenditure incurred for advertisement, transport etc., abatement granted. (iii) MRP scheme envisages suitable margin of profit for the wholesale dealer and the retail dealer which is given by way of prescribed percentage of abatement. In the case of the sale under DGS & D rate contract, there is no intermediary wholesale or retail dealer. As such, therefore, the DGS & D rate contract as seen from para 1 above is less than the corresponding MRP value under Section 4A. (iv) If the abatement was permitted under Section 4A taking rate contract as MRP that would be mean unjustified additional profit margin which otherwise has gone to wholesaler or retailer under Section 4A. (v) In view of the above, since the assessee is selling the goods at lower rate directly to the consumer under rate contract through DGS & D, the assessees are selling the goods as per assessable value under Section 4 that is why the abat....
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....when supplies are made to different government departments by way of DGS & D rate contract, the sale is in retail and hence, assessment under Section 4A is valid. They observed that DGS & D contract is only for rate and other conditions regarding sale, in this case, they distinguished their earlier decision the case of Bharati System Ltd. - 2002 (145) E.L.T. 626 where there was an admission that the sale was in bulk. The same ratio was followed in various other cases cited by the appellants. The Board's Circular cited also does not say anything different. Both the circular as well as the Tribunal places emphasis on the nature of the sale to determine whether the goods would come under the ambit of Standards of Weights and Measures Act and consequently, Section 4A. The Hon'ble-Supreme Court, in the case of Jayanthi Food Processing Ltd., clearly held that the nature of the sale is of no consequence to determine whether the goods are covered by Section 4A. The Board's Circular as well as the Hon'ble CESTAT's judgment regarding the nature of sale has to be understood in the context whether the provisions of the Standard Weights and Measure Act and Rules thereunder would be attracted as....
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....the Board's Circular states that in case of doubt, the department should refer the matter to the Legal Metrology Department. Therefore, on both counts, the original authority's order will have to be set aside." 5.2 It can be seen from the above reproduced portion that the findings given by the learned Commissioner (A) as regards the applicability of whether government department fall under the definition of 'service industry', is correct and in accordance with the law. Further, we find that the government of Andhra Pradesh i.e., the Controller of Legal Metrology Department, on a specific request from the respondent herein informed them that supplies to DGS & D will be covered under Standards and Weights of Measures Act, which is reproduced below : GOVERNMENT OF ANDHRA PRADESH From: To: The Controller, M/s. Hyderabad Engineering Legal Metrology, Industries, Andhra Pradesh, Balanagar Township, Hyderabad. Hyderabad -500 037. Letter : 17797/T2/04, dated : 25-11-2004 Sir, Sub: Legal Metrology Department - Printing of MRP on the packing boxes - reg. Ref : Your Letter No; SA/ADM/, dated ....