TaxTMI 
TaxTMI 
2023 (4) TMI 1072
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....ent @ 35% on the retail sale price. The DGCEI, Chennai Zone conducted a search on the appellant's premises on 23.1.2014. Their investigation led them to the conclusion that the appellant had willfully assessed their duty under Section 4A of the CEA, 1944, instead of Section 4 of CEA, 1944, even though they knew that Table Top Wet Grinders were sold only to one party (TNCSC) on an agreed price, which was not meant for retail sale but for free distribution to the eligible ration card holders in Tamil Nadu. The packages did not bear any RSP and did not carry the appellants brand name. Hence the appellant had evaded payment of duty by not assessing the goods under Section 4 of CEA, 1944. They also found that the appellant had cleared 1000 Table top wet grinders to TNCSC in December 2012 without payment of any duty. Their investigation culminated in the issue of show cause notice no 56/2015 dated 04/09/2015, demanding a differential duty of Rs 5,02,61,859/-, for the period December 2012 to June 2015. Another follow up notice was issued by the department on 25.7.2016 for the period from July 2015 to December 2015 for an amount of Rs.80,92,512/-. Both the notices were disposed off togethe....
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....learance. Hence the valuation in such cases has to be done in terms of sec. 4 of CEA, 1944 and the impugned order needs to be upheld. 5. We have carefully gone through the appeals and its connected records and the facts submitted by the parties during the hearing. The issues for determination are:- (i) whether the table top wet grinders sold by the appellant to TNCSC should be assessed under Section 4A or under Section 4 of the CEA 1944. (ii) whether the 1000 Table top wet grinders cleared to TNCSC in December 2012 without payment of any duty was proper. (iii) whether the invocation of extended period for issue of show cause notice will be attracted in the present case. 6. We find it necessary, at the outset, to examine and delineate the legal provisions and their applicability to this case before discussing the merits of the impugned order based on a factual matrix. The main issue on which the valuation of the impugned goods under Section 4/ 4A of CEA 1944, revolves is whether the clearance of the said wet grinders is covered under LMPCR, 2011. Rule 3 falling under Chapter 2 of LMPCR, 2011 which determines the legal position is as under: - ....
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....e determined by the mutual consent of parties to the dispute or due to their ignorance of law. We hence propose to examine the dispute as per law which was applicable at the relevant periods of time. 7. To include the impugned excisable goods sold in packages for assessment under Section 4A of CEA 1944, there should be a requirement in the Legal Metrology Act, 2009 (LMA, 2009) or the Legal Metrology (Packaged Commodities) Rules, 2011 (LMPCR, 2011) made there under or any other law to declare the price of such goods relating to their retail price on the package. Rule 3 falling under Chapter 2 of LMPCR, 2011 states that the applicability of the provisions of the Chapter shall not apply, among other things, to packaged commodities meant for 'industrial consumers' or 'institutional consumers'. The fact that the appellant is clearing packaged commodities is not disputed. Further the issue whether the packaged commodities sold by the appellant were meant for 'industrial consumer' is not before us as the impugned order, at para 39, categorises TNCSC not as a 'industrial consumers' but as a 'institutional consumers'. We hence examine the correctness of the impugned order categorizing TN....
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....t to TNCSC can be considered as being meant for an 'institutional consumer' was examined by a Coordinate Bench of this Tribunal in the case of Butterfly Gandhimathi Appliances Ltd Vs Commissioner of C Ex Chennai III, 2015 (327) E.L.T. 115 (Tri. - Chennai). The matter is pending for a final decision in the Supreme Court on an appeal filed by Commissioner of Central Excise, Chennai-IV [2016 (339) ELT A135 (SC)]. In the said case the appellant M/s. Butterfly Gandhimathi Appliances Ltd. were manufacturers of mixies and table top wet grinders falling under Chapter 8509 40 10 of the First Schedule to the Central Excise Tariff Act, 1985. The appellant procured orders from the Tamil Nadu Civil Supplies Corporation (TNCSC) for implementing the scheme of free distribution of the said goods to the beneficiaries of the families holding Ration Cards as announced by the Govt. of Tamil Nadu. The goods were assessed to duty on Retail Sale Price (R.S.P.) value under Section 4A of the CEA 1944. Revenue was of the view that valuation for payment of excise duty should have been done under Section 4 of the CEA 1944 on the ground that the goods were supplied to 'institutional consumers' and they accordi....
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....hold that TNCSC is not an 'institutional consumer' as per Rule 3 of LMPCR, 2011, as it then stood. As regards Revenues claim that the packages did not bear any RSP and did not carry the appellants brand name and hence were to be valued under Section 4 of CEA 1944, it is to be stated that this act of omission alone will not take the goods outside the purview of valuation under Section 4A of CEA 1944, if otherwise covered. Sub section 4 of Section 4A states that where the manufacturer removes such goods from the place of manufacture, without declaring the retail sale price of such goods on the packages such goods shall be liable to confiscation and the retail sale price of such goods shall be ascertained in the prescribed manner and such price shall be deemed to be the retail sale price for the purposes of this section. Hence we find that the appellant has correctly applied Section 4A of CEA 1944 for clearance of the impugned goods during this period. 9.2 Post-amendment (notification dated 06/06/2013). As discussed in para 9 above the amendment to Rule 3 of LMPCR, 2011 has brought about substantial changes in the law making it broader and introducing the concept of an intermedi....
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....s done at para 1 (vi) of the 'Order' portion of the impugned order is hence correct and is upheld. 11. Finally, having found that no differential duty, as was quantified in the impugned order, is payable for the entire period, the question at point (ii) of para 5, whether the invocation of extended period for issue of show cause notice will be attracted in the present case, loses relevance. We however notice that the appellant during the hearing, in pursuance of their submissions against invocation of extended period, has relied on audit report Gr.3/November 2012/CBE II Division Coimbatore II-B Range wherein, purportedly as per Advisory Note VII, by the Central Excise Department they were advised to follow Sec. 4A price for the branded goods for future clearance. We find that this important matter, involving a critical document that would be fatal to the departments allegation of suppression of facts, was not agitated by the appellants before the Lower Authority. It does not find mention in the impugned order nor was it a point in the appeal filed by them before this Authority. Suddenly we find the document (copy) being introduced at the end of oral submissions through the 'Syno....