TaxTMI 
TaxTMI 
2020 (12) TMI 504
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....olved in the present appeal is as to whether the valuation of wall putty in packages of 40kg should be determined under section 4 of the Central Excise Act, 1944 [the Excise Act] as was determined by the appellant or under section 4A of the Excise Act as contended by the Department. 4. It would, therefore, be relevant to examine the provisions of sections 4 and 4A of the Excise Act. They are reproduced below: "Section 4. Valuation of excisable goods for purposes of charging of duty of excise.-(1) Where under this Act, the duty of excise is chargeable on any excisable goods with reference to their value, then, on each removal of the goods, such value shall- (a) in a case where the goods are sold by the assessee, for delivery at the time and place of the removal, the assessee and the buyer of the goods are not related and the price is the sole consideration for the sale, be the transaction value; (b) in any other case, including the case where the goods are not sold, be the value determined in such manner as may be prescribed. Section 4A. Valuation of excisable goods with reference to retail sale price.-(1) The Central Government may, by notification in the Official Gazette....
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....or Retail Sale". Rule 3, which is relevant for the purpose of this appeal, is reproduced below: Chapter-II Provisions Applicable to packages intended for retail sale Rule 3. Applicability of the Chapter.-The provisions of this Chapter shall not apply to,- (a) packages of commodities containing quantity of more than 25 kg or 25 litre excluding cement and fertilizer sold in bags up to 50kg; and (b) packaged commodities meant for industrial consumers or institutional consumers. 9. A show cause notice dated May 1, 2009 for the period from April 2014 to June 2017 was issued to the appellant proposing to demand central excise duty by invoking the extended period of limitation. The appellant was required to pay duty under section 4A of the Excise Act in respect of packages of 40kg instead of under section 4 of the Excise Act. 10. The appellant submitted a detailed reply contending that wall putty was cleared in packages of 40kg and so in view of the provisions of rule 3 of the Rules, section 4A of the Excise Act would not be applicable since there is no statuary requirement of mentioning the MRP on the packages. The appellant also contended that the extended period of limitatio....
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....umers or institutional consumers; (iv) Both the clauses of rule 3 envisage independent and unconnected situations. Thus, if the packages are covered under rule 3(a), the rules will have no application even if rule 3(b) is not satisfied. This is for the reason that both clauses (a) and (b) of rule 3 are joined with a semi-colon(;). The word 'and' appearing in between such clauses (a) and (b) has to be read disjunctively and not conjunctively. In support of this contention, reliance has been placed on the decision of the Tribunal in Heidelberg Cement (India) Ltd. vs. Commr. of C. Ex., Nagpur & Raigad [2015 (315) E.L.T. 53 (Tri.- Mumbai)]. This decision of the Tribunal was subsequently followed by the Tribunal in ACC Ltd. vs. Commissioner of C.Ex., Coimbatore [2018 (359) E.L.T. 572 (Tri.-Chennai)] and C.C.E. & S.T.- Jaipur-I vs. Ultra Tech Cement Ltd. (Unit Kotputli Cement) [Appeal No. E/51506/2018-DB decided on 2.1.2019]; (v) This position is also clear from the clarification given by the Legal Metrology Department by the letter dated June 29, 2019 and it is the Legal Metrology Department which is the best judge to decide whether a product is required to be affixed with MRP; (....
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....y for the package to contain a declaration about the retail sale price in the package. 16. The contention of learned counsel for the appellant is that clauses (a) and (b) of rule 3 of the Rules envisage independent and unconnected situations and so if either of the conditions set out in (a) or (b) of rule 3 is satisfied, the provisions of Chapter II shall not apply and consequently rule 6 will not be applicable. 17. The contention of learned Authorized Representative of the Department, however, is that both the conditions set out in (a) and (b) of rule 3 have to be complied with, otherwise the package has to necessarily mention the MRP. 18. The terms "industrial consumer" and "institutional consumer" have been defined in rule 2 (bb) and 2 (bc) of the Rules. "Industrial consumer", has been defined to mean a consumer who buys packaged commodities directly from the manufacturer or from an importer or from wholesale dealer for use by that industry and the package should have a declaration 'not for retail sale'. "Institutional consumer" has been defined to mean a institution who hires or avails of the facilities or services in connection with transport, hotel, hospital or other org....
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....e subdivided by commas: A fundamental, and as many believe, the most essential part of Christianity, is its doctrine of reward and punishment in the world beyond; and a religion which had nothing at all to say about this great enigma we should hardly feel to be a religion at all (G. Lowes Dickinson)." 23. When rule 3 provides that the provisions of Chapter II shall not apply to (a); and (b), it would not mean that the conditions stipulated in both (a) and (b) have to be satisfied for the provisions of Chapter II not to apply. 'And' is clearly used disjunctively and not conjunctively. If what has been contended by the learned Authorized Representative of the Department is taken to be the true intention behind enacting rule 3, than in that case all that would have been stated in rule 3 would be that the provisions of Chapter II shall not apply to packaged commodities of more than 25 kg or 25 litres (excluding cement and fertilizer sold in bags up to 50 kg) meant for industrial consumers or institutional consumers. 24. The way rule 3 of the Rules is set out, makes it clear is that the provisions of the Chapter II shall not apply either to packages of commodities containing quantit....
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.... industry like transportation including airways, railways, hotel or any other similar service industry. (b) Industrial Consumer Means those consumers who buy packaged commodities directly from the manufacturers/packers for using the product in their industry for production, etc. 4.5 It is seen that the appellant had sold cement in packs of 50 kgs each. Except for 945.05 MTs (self-consumption) and 632.30 MTs (stock-in-transit closing stock at warehouse), the remaining portion of the disputed clearances totalling to 29415.25 MTs were sold either to manufacturers, users, asbestos and cement/pipe manufacturers, ready-mix concrete manufactures or otherwise to builders, as infrastructure/buildings/ government projects construction, educational institutions, hospitals and societies. From a combined reading of the above reproduced provisions of Rule 2A of the Rules, these genre of buyers would fall under the category of Institutional Consumer or Industrial Consumer, in our opinion. On this score itself, we find that the provisions applicable to packages intended for retail sale in Chapter II of the said rules, will not apply to the clearances of cement by the appellant to its Industria....