TaxTMI 
TaxTMI 
TaxTMI 
2016 (11) TMI 1084
X X X X Extracts X X X X
X X X X Extracts X X X X
....t has filed Memorandum of Cross-objections questioning the legality of the grounds of appeal put forth by Revenue. While assessment on the basis of transaction value is the norm for levy of duty of Central Excise, the special provision in section 4A, incorporated by Finance Act, 1997, is attracted for: "Section 4A. Valuation of excisable goods with reference to retail sale price. - (1) The Central Government may, by notification in the Official Gazette, specify any goods, in relation to which it is required, under the provisions of the Standards of Weights and Measures Act, 1976 (60 of 1976) or the rules made thereunder or under any other law for the time being in force, to declare on the package thereof the retail sale price of such goods, to which the provisions of sub-section (2) shall apply. (2) Where the goods specified under sub-section (1) are excisable goods and are chargeable to duty of excise with reference to value, then, notwithstanding anything contained in section 4, such value shall be deemed to be the retail sale price declared on such goods less such amount of abatement, if any, from such retail sale....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... declaration in respect of maximum retail price and net quantity shall be declared on packages containing 10grams to 20grams or 10 ml to 20 ml. 3. The contention of the assessee in support of resort to section 4 of Central Excise Act, 1944 was that the packaged commodities did not contain more than ten grams and ten mililitres respectively and that they were not required to declare the retail selling price on the package and, therefore, not covered by the statutory conditions in section 4A(1) of Central Excise Act, 1944. The case of Revenue is that these were cleared from the factory of the assessee in 'multi-piece packages' for which an additional set of prescriptions are laid down, viz., '17. Additional declarations to be made on multi-piece packages.- (1) Every multi-piece package shall bear thereon, in addition to the declaration required to be made under any other provision of these rules, a declaration of - (a) the number of individual pieces contained therein; (b) the retail sale price of the multi-piece package' As to what constitutes the package which requires declaration of the above details, the definition in Rule 2 '(j) "multi-piece packa....
X X X X Extracts X X X X
X X X X Extracts X X X X
....egislation is not attracted unless the said notification itself enumerated the commodities eligible for exemption from application of section 4A of Central Excise Act, 1944. According to the reviewing authority, the impugned order is flawed in having invoked what it expresses as 'an extraneous ground.' This, we find, is without rationale. Section 4A applies only when the Standards of Weights of Measures Act, 1976, or rules framed thereunder, prescribe requirement to declare 'retail selling price' on the packages. As we have pointed out supra, the Act itself does not address the matter of packaged commodities but left it to executive wisdom to create and notify. The primacy accorded to the said Rules, thereby, is not questionable except when uninfluenced by informed consideration. It is also settled law that the application of section 4A of Central Excise Act, 1944 rests on two legs both of which are indispensable: requirements under the Standards of Weights and Measures (Packaged Commodities) Rules, 1977 and notification under section 4A(1) of Central Excise Act, 1944. Therefore, we do not intend to linger further on this specious espousal. We also notice that another ground advoca....
X X X X Extracts X X X X
X X X X Extracts X X X X
....andards of Weights and Measures Act, 1976. That no provision of the said Act prescribes declaration on packaged commodities is apparently not within the knowledge of the reviewing authority which has made such an authoritative assertion. It would appear that the reviewing authority has convinced itself of the overriding supremacy of a notification issued under section 4A(1) of Central Excise Act, 1944 over the law framed by the supreme legislative body that grants powers to issue rules for protection of consumer rights. And holds that listing in a notification issued under section 4A(1) of Central Excise Rules, 1944 suffices for 'retail sale price'-based assessment. Compounding this elegant display of jurisprudential knowledge, the reviewing authority has gone on to cite an unsustainable proposition that exemption from a prescription intended to protect rights of consumers cannot be invoked without provision for such exemption in Central Excise Act, 1944. We are not certain if such peremptory dismissal of legislative jurisdiction has any basis in law. We, with our restricted status, knowledge and exposure, would not like to be presumptuous enough to elaborate on the propriety there....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ubmissions especially when efforts have been invested by the learned Authorized Representative to argue the matter before us. The issue is also one that may impede smooth business operations if allowed to remain unresolved. We, therefore, examine the statutory provisions and the binding precedents rendered on the subject. 11. Learned Authorised Representative places reliance on Varnica Herbs v. C.B.E & C, New Delhi [2004 (163) ELT 160 (Mad.)], Arora Products v. Commissioner of Central Excise [2012 (276) ELT 0077 (Tri-Del.), and Whirlpool of India Ltd v. Union of India & Ors [2007 (218) 0167 (SC)]. Learned Counsel for respondent has cited Commissioner of Central Excise v. Urison Cosmetics Ltd [2006-TIOL-354-CESTAT-MUM-LB], Pidilite Industries Ltd v. Commissioner of Customs (Import), Nhava Sheva [2014 (314) ELT 479 (Tri-Mumbai)], Commissioner of Central Excise, Chennai v. Anabond Ltd [2009 (234) ELT 481 (Tri-Chennai), Commissioner of Central Excise, Mumbai - VI v. Charishma Cosmetics Pvt Ltd [2006-TIOL-726-CESTAT-MUM], Aero Pharma Pvt Ltd & Ors v. Commissioner of Central Excise [2006-TIOL-1186-CESTAT-MUM], Bharat Cosmetics v. Commissioner of Central Excise, Thane [....
X X X X Extracts X X X X
X X X X Extracts X X X X
....prescriptions apply should be viewed in that context. The objective being the protection of consumer interests, the prescriptions under the Rules are designed for declaration on the packing intended for delivery as such to the ultimate user. The manufacturer is not required to conform to the prescriptions on other packaging intended for convenience of handling. 15. The pivotal expression in the definitions is 'intended for'. The intent is not manifest in a declaration but the intent of the manufacturer is implicit in the compliance with the prescriptions. It is for that reason that the statute itself contains the circumstances in which penalties can be visited upon the handlers if the prescriptions are flouted on packages displayed for sale by retailers. Likewise, Central Excise Act, 1944 has, since 1999, provided for penal consequence in the event of non-compliance and, since 2003, provided for re-assessment. The State cannot, except under health and safety laws, dictate the manner in which goods are to be delivered or received by the customer but it has prescribed the information content to be declared if the goods are delivered to the customer as 'pre-packaged' with the consume....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d the records in detail, we notice 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. 19. These individual pieces did have the retail sale price declared on them; however, the net weight or measure contained in each of the 'sticks' and 'pens' do not exceed 10 grams and 10 mililitres respectively. They are, therefore, covered by the exception in Rule 34 (b) of Standards of Weights and Measures (Packaged Commodities) Rules, 1977 and declaration on the piece is merely voluntary. The original authorit....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d 'multi-piece package' in the Rules as well as the additional declarations required to be made on 'multi-piece packages as per Rule 17 and the exemption to application of the said Rules in Rule 34, the Hon'ble High Court decided that '15. A perusal of these provisions makes it clear that articles kept in separate pouches by the petitioner can be termed as multi-piece packages and such products can be sold individually in single piece or mono-carton of six pouches. The contention of the petitioner that exemption under Rule 34 would be applicable is not acceptable. Even though the net weight is less than 10 grams, it is evident that article is not intended to be sold either by weight or measure as contemplated under Rule 34 (b). The contention that the clarification issued by the respondent No.1 has the effect of whittling down the exemption granted under Section 34 is not all acceptable.' Further reliance was placed on the decision of the Tribunal in Arora Product v. Commissioner of Central Excise, Jaipur-II [2012 (276) ELT 77 (Tri-Del)] which distinguished the facts in the case from that of Commissioner of Central Excise v Kraftech Products Inc. [2008 (224) ELT 504 (SC)] as the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....al. We agree with the said opinion of the Tribunal.' 22. The decision of the Tribunal in re Hindustan Unilever Ltd., relating to import of lipsticks which were presented for assessment by the importer as pieces for clearance, will not find application in the present dispute where weight is specifically declared on the individual packages contained in the secondary packing. This order had also been set aside by the Hon'ble High Court of Bombay. Revenue has attempted to clothe the contention of the reviewing authority, that notification under section 4A(1) of Central Excise Act, 1944 operates independently for assessment under the special provision, with legality by drawing upon the decision of the Hon'ble Supreme Court in Whirlpool of India Ltd v Union of India and others [2007 (218) ELT 0167 (SC)]. We are unable to grant approval to this attempt as that decision was rendered while determining the primary condition for rendering any goods to be 'packaged commodity.' That the goods in this dispute are 'packaged' is not in question. The Tribunal in re Urison Cosmetics Ltd [2006 (198) ELT 508 (Tribunal-LB), which found approval of the Hon'ble Supreme Court, has relied upon the s....