TaxTMI 
TaxTMI 
2022 (11) TMI 1225
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....aid during the period June 2007 to November 2008. under proviso to Section 11A(1) of Central Excise Act, 1944; 2. I confirm the duty amount of Rs.33.613/- and Rs.672/- Education Cess and Rs.336/- S&H Ed. Cess totally amounting Rs.34.621/-(Rupees Thirty Four Thousand Six Hundred and Twenty one only) short paid during the period of Dec. 2008 to January, 2009 under the proviso to Section 11A of Central Excise Act, 1944. 3. I also order the assessee to pay the interest on the above said short paid duty under Section 11AB of Central Excise Act, 1944; 4. I impose equivalent penalty amounting to Rs. 4,45,267/- under Section 11AC of Central Excise Act, 1944 and Rs.34,621/- under Rule 25 of Central Excise Rules, 2002 totally amounting to Rs.4,79,888/- (Rupees Four Lakhs Seventy Nine Thousand Eight Hundred and Eighty Eight Only) upon the Noticee. I order the Noticee to pay the penalty imposed forthwith." 2.1 Appellant is registered for manufacture of packaged drinking water under Chapter Heading No. 22019090 of Central Excise Tariff. This product has been classified under Section 4A of the Central Excise Act, 1944. Accordingly the appellant has been declaring MR....
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.....- LB)] • The contention of Revenue that they were not to be assessed under the said provisions but under Section 4A is without any basis. The basic reason for seeking that the goods be assessed as per Section 4 is that the appellant has been receiving certain performs from ABCTC for manufacture of the bottles to be filled with the packaged drinking water. Secondly, ABCTC is not an institutional buyer. Both these contentions cannot be held to be correct in view of the case laws referred above. • Further, as per Circular No. 625/16/2002-CX dated 28.02.2002, in case Revenue officer entertained any doubt with regard to the applicability of the provisions of Standards of Weights and Measures Act and the rules made thereunder, they should have referred the matter to the concerned authorities for their opinion before proceeding against them. No such opinion was ever taken. Accordingly in view of this circular also, the demand cannot be sustained. • Even if it is held that valuation was to be done as per Section 4, then for the reason that appellant was receiving certain inputs from their customer, then also valuation should have been done as per the....
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....heir industry for production, etc. It was held by the Hon'ble Supreme Court in the case of Jayanti food Processing (P) Ltd. v/s CCE -2007(215)ELT 327(SC) that the assessment of the goods in Section 4A of the Central Excise Act depends on the following conditions. (a) The goods should be excisable goods and the Central Government must specify such goods by notification in the official gazette. (b) The goods should be such as are sold in the packages. (c) There should be a requirement in the Standard of Weight and Measures Act or the Rules made thereunder or any other law, to declare the retail price of such goods on their package. (d) The valuation of such goods would be as per the declared retail sale price on the packages, less the amount of abatement. There is no dispute that the goods in the instant case were supplied to institutional consumer and there was no legal requirement to declare the retail price of the goods on their package. The Labels of the product produced by the appellants along with their reply to the Show Cause Notice had no MRP printed on it. The inputs for the manufacture of bottles were supplied to the....
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....ding the fact of free supply of wheat by MCD. In any case it has already been demonstrated [and also supported by the High Court decision in case of Australian Foods Ltd. (supra)] that MRP was not required to be printed on the impugned goods, and also that the price printed by the appellants was not MRP. 7. From the foregoing there remains no doubt that the biscuits supplied to MCD are not eligible for assessment in terms of Section 4A and consequently the demand of differential duty is clearly sustainable. As regards the allegation of suppression of facts, it is evident that they had nowhere declared that they were getting free supply of wheat from MCD and in spite of being fully aware of this fact, they deliberately and misleadingly claimed that Rs. 2/- printed on each of the packages was the correct MRP and that too for all packages ranging in weight from 61 gms. to 71 gms to 100 gms each. This shows that they were just printing a price in the name of MRP for the sake of making a claim for assessment under Section 4A and thereby evade duty by hoodwinking Revenue. Thus the suppression of facts and intent to evade duty are more than evident in this case. Both Shri Bajaj a....
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....ne look at Rule 2(p) would show that in order to be covered under that definition such package must have been intended for "retail sale" for consumption by an individual or a group of individuals. In our view these two definitions would have to be read together to properly understand the scope thereof. In order that the package should be properly described as a "retail package", the sale has to be through the "retail sale" for consumption by an individual or a group of individuals. In the present case, admittedly, the sale of the package was only to the hotel. It may be that the hotel may ultimately sell the commodity therein, i.e., the ice-cream (not the package) to the individuals or the group of individuals. This was not a sale in favour of an individual or group of individuals. We would have to understand the scope of the term "consumer" used in Rule 2(o) to be the individual or group of individuals who consume the commodity. It is undoubtedly true that for a sale being a "retail sale" it need not contain material for the consumption of a single individual only, it can be for a group of individuals also. However, a hotel to which the package is supplied cannot be covered in the....
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....fined in Rule 2(x)(ii) as it contained the commodity (ice-cream) and was sold to intermediary (Hotel) for selling the same to the consumer in small quantities. Then Rule 29 would apply to such package which does not require the price to be displayed on the package. What is required to be stated is (a) name and address of the manufacturer (b) identity of commodity and (c) total number of retail packages or net quantity. Shri Ravindra Narain is quite justified in relying on Rule 2(x) and Rule 2(q). The Tribunal does not refer to these vital Rules. 16. There is one more substantial reason supporting the appellant. Shri Ravinder Narain invited our attention to Rule 34 in Chapter V of SWM (PC) Rules which provides for exemptions. We have quoted Rule 34 earlier. The Rule has now been amended. However, under the unamended Rule there is a specific declaration that the SWM (PC) Rules shall not apply to any "package" containing a commodity if the marking 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". Learned Counsel points out that the "pa....
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....It also includes supplying of utilities or commodities. In that view we are not prepared to give a narrow interpretation to the term "service any industry". We, therefore, accept the arguments advanced by Shri Ravinder Narain that the "package" sold by the assessee to the hotel was, apart from being for the exclusive use of the hotel was, also "for the purpose of servicing that industry". If that is so, then the SWM (PC) Rules would not apply at all. 17. The Tribunal has given very narrow meaning to Rule 34 by firstly holding that ice-cream is not a "raw material". There the Tribunal was right but the Tribunal was not right by holding that the words "servicing any industry" were not applicable to such "package". We, therefore, accept the arguments of the learned Counsel and reject the contention raised by Shri Subba Rao. If that is so, the appeal would have to be allowed and it would have to be held that Section 4A will not apply to the ice-cream sold by the assessee." Same view has been expressed by Hon'ble Supreme Court in the case of Liberty Shoes Ltd. [2015 (326) ELT 422 (SC)] wherein the Hon'ble Supreme Court following its earlier decision in Jayanti Food has held ....
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....he manufacturer, (b) identity of commodity, and (c) total number of retail packages or net quantity. Shri Ravinder Narain is quite justified in relying on Rule 2(x) and Rule 2(q) (sic 29). The Tribunal does not refer to these vital Rules. 34. There is one more substantial reason supporting the appellant. Shri Ravinder Narain invited our attention to Rule 34 in Chapter V of the SWM (PC) Rules which provides for exemptions. We have quoted Rule 34 earlier. The Rule has now been amended. However, under the unamended Rule there is a specific declaration that the SWM (PC) Rules shall not apply to any "package" containing a commodity if the marking 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". Learned counsel points out that the "package" which is sold by the assessee mentions that it is specially packed for the exclusive use of the catering industry. 35. Learned counsel further argues that such "package" was for the purposes of "servicing the hotel industry or catering industry" as the case may be. Learned counsel is undoubte....
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....onstitutional amendment having been passed, the definition of "sale" contained both in the 1976 Act and now in the 2009 Act would go to show that composite indivisible agreements for supply of services and food and drinks would not come within the purview of either enactment, and that this is for the very good reason that the object for both these enactments is something quite different - the object being, as has been pointed out above, to standardize weights and measures for defined goods so that quantities that are supplied are thus mentioned on the package and that MRPs are mentioned so that there is one uniform price at which such goods are sold." 4.7 Further we also take note of Circular No. 625/16/2002-CX dated 28.02.2022 wherein it has been clarified as follows:- "5. A somewhat similar issue was examined by the Board earlier vide letter F. No. 341/64/97-TRU, dt. 11-8-97 [1997 (95) E.L.T. T3]. This clarification was issued in the context of certain assessees printing MRP on packages even where there was no statutory requirement to do so under the Standards of Weights & Measures Act, 1976. It was clarified that in such cases duty will be charged u/s. 4 of C.E. Act,....