TaxTMI 
TaxTMI 
2023 (8) TMI 609
X X X X Extracts X X X X
X X X X Extracts X X X X
....ioner (AR) appearing on behalf of the Revenue reiterates the grounds of appeal. He submits that since the appellant have packed 50 pouches in one packet, the same should be treated as retail pack and accordingly packet of more than 10gm is liable to be valued under Section 4A and not under Section 4. Accordingly, the Adjudicating Authority has wrongly dropped the proceedings of the show cause notice. 3. Shri Abhishek M. Mehta learned Counsel appearing on behalf of the respondent submits that this issue is no longer res-integra as in various cases it was held that even though the packet contains more than 50 pouches but the each pouch is less than 10gms and MRP is affixed on each pouch and not on the packet of 50 or 40 pouches therefore, the same should be valued under Section 4 and not under Section 4A. He placed reliance on the following judgments:- (a) Arora product vs. CCE, Jaipur - 2012 (276) ELT 77 (Tri. Del.) (b) Makson Pharmaceuticals (I) Pvt. Limited vs. CCE&ST, Bhavnagar - (2023) 8 Centax 4 (Tri. Ahmd.) 4. On careful consideration of the submissions made by both the sides and perusal of record, we find that this issue is no longer res-integra as in ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....piece packages (3 gms. & 6 gms., 12 gms.) up to 7-3-2004. However, with effect from 8-3-2004 the appellants stopped payment of Central Excise duty adopting value under Section 4A of Central Excise Act, 1944 on multi piece packages containing 3 gms and 6 gms pouches and instead started paying duty adopting value under Section 4 of Central Excise Act, 1944. The appellants continued to pay Central Excise duty on 12 gms. Pouch under Section 4A of Central Excise Act, 1944. 4. Under Rule 34 of Standards of Weights and Measures (Packaged Commodities) Rules, 1977, if any goods are sold by weight and the net content of each of the retail pack is below 10 gms, the manufacturers were not required to affix MRP on such packages. The Appellants were claiming this exemption for items 2, 3 and 4. The SCN raises the issue that these goods were not sold by weight but in terms of number of pouches. Further the SCN alleged that the multi piece packages also were retail packages and hence under the law the Appellants were required to affix MRP on the multi-piece packages and they were doing so. So the SCN proposed that provisions of Section 4A of Central Excise Act would apply to the multi-pie....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ckage to contain the net quantity and the maximum retail price read with the definition of multi- piece package given in Rule (j) ibid. The Hon'ble Court has further held that even though the net weight of a commodity might be less than 10 gms., but if it was evident that article was not intended to be sold either by weight or by measure as contemplated under Rule 34(b) ibid, then benefit of Rule 34(b) ibid will not be applicable. The facts of the present case are identical to Varnica Herbs case. In this case also small packs of 3 gms and 6 gms are not intended to be sold either by weight or by measure." 9. Aggrieved by the order the Appellant filed appeal with the Commissioner (Appeal). The Commissioner (Appeal) confirmed the finding of the adjudicating authority. He also examined the issue whether the multi-piece-package is a retail package and recorded his finding in para 13 of the order which is reproduced below : "13. The other point that has been raised is that the appellants were clearing only wholesale packages, that too, only to intermediaries and not to consumers. These wholesale packages or the poly packs containing 32 pouches of 6 gms each, 24 pouches ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....packages and individual pieces contained in such a multi piece package (if the individual pieces are capable of being sold separately) is statutorily required. The said Circular goes on to state that such packages are required to be assessed in terms of Section 4A of the Act." 10. Aggrieved by the order of Commissioner (Appeal), this appeal is filed before the Tribunal. 11. The Appellants rely on C.B.E. & C. Circular 411/44/98-CX., dated 31-7-1998 : "Subject : Charaing of excise duty with reference to maximum Retail Price - Reg. I am directed to say that doubts have been raised as regards charging of excise duty with reference to maximum retail price under Section 4A of Central Excise Act, 1944 in cases where MRP is not required to be affixed on packings, as a statutory requirement under the Standards Weights and Measures Act or any other law for the time being in force, even though some manufacturers may voluntarily be affixing the MRP on such packings. 2. Instructions were issued by the Board vide Letter F. No. 341/64/97-TRU, dated 11th August, 1997 clarifying that sub-section (1) of Section 4A applies only when the MRP is required to ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....l weight of the multi-piece package itself was below 10 grms which is not the case in this case. The ld. JCDR relies on the decision of Madras High Court in Vernica Herbs v. C.B.E. & C. - 2004 (163) E.L.T. 160. 14. We have considered the facts of this case and the various decisions of this Tribunal and the Higher Courts quoted by either side. 15. In the case of Kraftech Products - 2008 (224) E.L.T. 504 (S.C.) hair dye in 3 grm sachets packed into multi-piece package of three such sachets was under dispute. The Apex Court did not accept the argument that the goods were sold in numbers and accepted the contention of the assessee that the goods were sold by weight. In para 23 the Apex Court observed as under : "23 We have noticed hereinbefore that each package offered to sell to the customer contains three sachets. Net weight of all the three sachets are stated thereon. It is a "multi-piece package" which is capable of being offered to sell as such only because a package is a "multi-piece package", the same cannot be taken out of the umbrage of exemption clause contained in Rule 34 of the Rules. Why the commodity cannot independently be sold either by weight....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... that case the assessee had not affixed MRP for the jar as a whole. So it was very evident that the manufacturer did not intend the jar to be sold in Retail. Extracts from para 1.2 and para 2.5 of the order are relevant which are reproduced below : Extracts from para 1.2 of the order : "(e) The wholesale pack in which the individual Toffy Max Caramel/Chocolate are packed carries, inter alia, the following declaration on it : Wholesale Package MRP 50 paise per piece (inclusive of all taxes) Net Weight 500 g (125 Units) Mfg. ............ Batch No. ............" Extracts from para 2.5 of the order : "If the plastic jar or plastic bag, in which the Toffees are packed, are packages intended for retail sale, the law requires that the Maximum Retail Price (inclusive of all taxes) of the said jar or bag is to be printed on them. Since the appellants never intended the jar or bag to be sold to the retail consumers as such, the Maximum Retail Price for the bag or jar is not printed on the bag or jar. What is required to be printed on the bag or jar is the MRP for individual Toffee. Thus, the appellants are not printing a....
X X X X Extracts X X X X
X X X X Extracts X X X X
...., of the commodity contained in the package or where the commodity is packed or sold by number, the number of the commodity contained in the package; (d) the month and year in which the commodity is manufactured or pre-packed. (e) the retail sale price of package; (f) where the sizes of the commodity contained in the package are relevant, the dimensions of the commodity contained in the package and if the dimensions of the different pieces are different, the dimensions of each such different piece; (g) such other matters as are specified in these rules." It is to be noted that as per Rule 2A of the said Rules the expression "package" in Rule 6 shall be construed as package intended for retail sale. 23. So in the case before us the Appellant was required under law to declare MRP on the multi-piece package and the Appellant was doing so. Further this commodity was notified for levy of excise duty based on valuation as per Section 4A of the Central Excise Act. Thus both the legal requirements for applying Section 4A were satisfied and hence Central Excise duty should have been paid adopting the value as per Section 4A. 24.....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... In these rules, unless the context otherwise requires- (j) "net quantity", in relation to commodity contained in a package, means the quantity by weight, measure or number of such commodity contained in that package, excluding the packaging or wrapper;] From the above substitution of Rule 2(j) of SWM (PC) Rules, 1977, we do not find any adverse effect in the principle of law on the issue in hand laid down by the Hon'ble Supreme Court. Despite the substitution of Rule 2(j), the provision of Rule 34(b) of SWM (PC) Rules, 1977 remain intact, according to which there is no requirement for affixing/printing retail sale price on the package of the goods of less than 10 gram therefore, we do not find any substance in the revenue's appeal. The law laid down by the Hon'ble Supreme court in the appellant's own case shall continue to be applicable in the present case also. The relevant order of the Hon'ble Supreme Court in the appellant's own case is reproduced below:- 2. In view of the order of this Court dated 15th September, 2008, dismissing CA. No. 7559 of 2008 (D.19192/2008) [2008 (232) E.L.T. A107 (S.C.)], preferred by the Revenue against the order of the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....have issued credit note to their customers and consequently the said amount was not collected. In this regard, for ease of reference we reproduce provision of Section 11D as under:- SECTION [11D. Duties of excise collected from the buyer to be deposited with the Central Government. - (1) Notwithstanding anything to the contrary contained in any order or direction of the Appellate Tribunal or any Court or in any other provision of this Act or the rules made thereunder, [every person who is liable to pay duty under this Act or the rules made thereunder, and has collected any amount in excess of the duty assessed or determined and paid on any excisable goods under this Act or the rules made thereunder from the buyer of such goods] in any manner as representing duty of excise, shall forthwith pay the amount so collected to the credit of the Central Government. [(1A) Every person, who has collected any amount in excess of the duty assessed or determined and paid on any excisable goods or has collected any amount as representing duty of excise on any excisable goods which are wholly exempt or are chargeable to nil rate of duty from any person in any manner, shall forthw....