TaxTMI 
TaxTMI 
2022 (5) TMI 200
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.... and packed in a separate carton box/ Master box; labels are affixed on both the baby and the master boxes; the Appellant discharges excise duty at the time of clearance of goods from their factory, as the activity undertaken at their factory amounts to manufacture in terms of Section 2(f)(iii) of the Central Excise Act, 1994 read with Sl. No. 93 of the Third Schedule to the Central Excise Tariff Act. The packages of the goods bear a declaration that the same are meant for industrial consumers; packages weighing less than 25 kg, are cleared on payment of excise duty on the MRP basis and packages weighing more than 25 kg are cleared on payment of excise on the transaction value under Section 4 of the Central Excise Act, 1944. 2.1. Revenue was of the opinion, on an audit of the of the Appellant's records at Nelamangala unit, for the period from January 2008 to March 2012, that the appellants wrongly clearing final products, falling under CETH 8536 ( being specified goods notified under Notification No.14/2008 CE (NT) dated 01.03.2008 as amended and Notification No.49/2008 CE NT dated 24.12.2008), to non-industrial consumers i.e., dealers/channel partners by paying duty on transactio....
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....utional consumers and goods weighing more than 25 kg. in the present case, the Appellants have not affixed MRP on goods weighing more than 25 kg and have clearly declared on such products that they are 'For industrial use only'; goods weighing more than 25 kg, were cleared only to industrial/ institutional consumers who have used these products in their own industry; further, the Appellants have declared MRP only on packages weighing less than 25 kg; even in respect of these clearances, made to industrial/ institutional buyers, provisions of the Legal Metrology Act and the Rules are not applicable; in view of the above, no demand can be raised in respect of goods weighing more than 25 kg which have been cleared to industrial and institutional consumers as the provisions of the Legal Metrology Act are applicable only to goods weighing less than 25 kg; further no demand can be sustained in relation to goods weighing less than 25 kg also as they clearly indicate that they are 'Packed for the exclusive use in any industry as a raw material or for the purpose of serving any industry, mine or quarry'. 5. Learned senior counsel submits that as it is impossible for the manufacturers to re....
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.... not covered under the definition of a consumer; since the dealer resells the goods to Industrial consumer. * Once the package does not satisfy the definition of a Retail Package and the dealer to whom the package is sold does not satisfy the definition of consumer, the said Act and Rule would not apply to such supplies; 7. Learned senior counsel submits that the decision of Jurisdictional High Court is binding on the Authorities / Tribunal and the assessee in their jurisdiction as held in CCE, Chandigarh vs. Kashmiri Conductors - 2002-TIL-353-CESTAT-DEL-LB and CCE, Jalandhar vs. Bhagwati Forex - 2014-TIOL-1173-CESTAT-DEL He further submits that in the case of Jayanthi food processing Ltd vs. CCE - 2007 (215) ELT 327 (SC), it was has held that where there is a requirement to follow the Standard Weights and Measurement Act, the provision of Section 4A would not apply even if the manufacturer voluntarily declare MRP etc; therefore, even if the goods are sold to the dealer who in turn supplies to the industrial consumer under a package satisfying the definition of retail package, provision of Section 4A would not apply, since the dealer who purchases the said package does not satis....
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....tion are sold essentially as industrial raw material and no specification in terms of numbers are attributed to such package nor are they displayed in any retail outlet; Tribunal in the following decisions have held that when the goods are sold by weight, the Standard Weights and Measurement Act would not apply even these are sold in numbers. * Sarvotham Care Ltd v. Commissioner of Cus & C.Ex., Hyderabad- 2012(286) E.L.T 357 (Tri-Bang.) * Pidilite Industries Ltd. v. Commr. Of Customs (Import), Nava Sheva.- 2014(314) E.L.T 479 (Tri-Mumbai) * Hindustan Lever Ltd. v. Commissioner of Customs, Raigad- 2014(312) E.L.T 491 (Tri-Mumbai) 10. Learned senior counsel submits that Show Cause Notices were issued on 15.07.2013 and 1.05.2013 demanding duty for the period from April, 2011 to March, 2012 and April 2012 to March 2013, respectively; part of the demand for the period prior to May 2012 amounting to Rs. 1,55,71,032 has been confirmed by, invoking the extended period under the proviso to Section 11A of the Act; extended period of limitation is not applicable as they have not suppressed any facts from the department, much less acted with an intent to evade the payment of duty; Longe....
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....etrology Act, 2009 (1 of 2010) 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) Whether 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 price as the Central Government may allow by Notification in the Official Gazette. Rule 2 of The Legal Metrology (Packaged Commodities) Rules, 2011: (jj) "retail packages" means the packages which are intended for retail sale to the ultimate consumer for the purpose of consumption of the commodity contained therein included the imported packages: PROVIDED that for the purpose of this clause, the expression 'ultimate consumer' shall not include industrial or institutional consumers. An amendment brought into effect from 14.05.2015 substitutes the definition of industrial consumer to be as follows: Rule 2 (bb): "ind....
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....xcisable goods and for the purposes of charging of the duty of excise. It provided the mechanism of determining the valuation of the goods under various circumstances, e.g., in the matter of wholesale trade or in the matter of sales being at the different prices for different places of removal or in case where the assessee sold the goods only to related persons, etc. Section 4A of the Act, as would be clear from the language of sub-section (1), linked the valuation of the goods to the provisions of SWM Act or the Rules made thereunder by firstly providing that it would be for the Central Government to specify any goods in respect of which the declaration of price on the package was required under the provisions of SWM Act, Rules made thereunder or any law for the time being in force. In short sub-section (1) was linked with the packages of the goods in respect of which the retail sale price was required to be printed under SWM Act and the Rules made thereunder or any other law. Sub-section (2) then provides that such specified goods where they are excisable goods would be valued not on any other basis but on the basis of the retail sale price declared on such packages. The Section ....
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....d and Notification No.49/2008-CE (NT) dated 24.12.2008 to fall under Section 4A. However, the dispute appears to be regarding the definition of 'Industrial Consumer'. Whereas the definition of 'Industrial Consumer' at the relevant point of time meant industrial consumers who buy packaged commodities directly from the manufacturer for use by that industry. We find that learned Commissioner has confirmed the demands mainly on the grounds that: * The goods are notified under Section 4A. * The appellants have not given any justification for non-applicability of Section 4A for items weighing more than 25 kg when the goods are assessed to duty on the basis of numbers and not by weight. * The goods have been cleared to non-industrial consumers/customers such as dealers and channel partners and hence, are not excluded from the application of Legal Metrology Act, 2012. * As the issue was detected consequent to a conduct of an audit, extended period is rightly invoked. 17. The department's contention is that the exclusion from the applicability of the Rules would be available only when the impugned goods are sold by the appellant-manufacturer directly sold directly to industrial con....
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....ch goods for resale or for any commercial purpose. The consumer should be an individual who purchases goods for his personal use. Reseller of goods or purchaser of goods for any commercial purpose is not treated as consumer. Therefore, when the word 'consumer' is not defined under the Act and Consumer Protection Act was enacted to protect the interest of consumer whose interest is not sufficiently protected under the Act. 10. As per Rule 6 of the Rules which prescribes the declaration to be made on every package makes it clear that one of the requirement, which a package should contain is common generic names of the commodity contained in the package, as contained in Rule 6(1)(b). 11. The learned single Judge considering the definitions of 'retail package', 'retail sale', 'retail sale price' and considering Clause (a) of Rule 34 of the Rules held that Rule 34 expressly exclude the application of Rule 6 to any package containing a commodity if the making on the package unambiguously indicates that it has been specially packed for the exclusive use of any industry as a raw material or for the purpose of servicing any industry, mine or quarry. The packages meant for industry, mine....
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....stockiest spread all over India, 90% of the sales are generated through the involvement of core team of sales/service engineers of respondent No.2 who are trained in specialized Eutectic Castolin Welding Process. 15. The learned single Judge after considering the entire material on record has rightly held that the impugned notices issued by appellant No.2 are one without authority, illegal and contrary to the express provision contained in the enactment, cannot be sustained and rightly quashed the notices. We do not find any grounds to interfere with the impugned order." 18. We find that it is not disputed that the impugned goods are intended for industrial consumers; the endorsement that they are for industrial use only is made on the packets and that they weigh more than 25 kg. The contention of the department is that when the clearance is through the channel partners, they are not excluded from the provisions of Legal Metrology Rules/Act. The appellants contend that as it is impossible for the manufacturers to reach all industrial and institutional costumers in every nuke and corner of the country, the goods are made available through their channel partners, in addition to di....