TaxTMI 
TaxTMI 
2024 (1) TMI 818
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....ive rates of excise duty for the cement other than cleared in packaged form, falling under Chapter Heading 2523 29 has been fixed at Rs.400 per MT. The appellant had cleared the cement in 50 kg. bags without printing Retail Sale Price on the bags as required. The rate of duty as per the Tariff is Rs.600 per MT which is applicable for packed cement on which it is affixed with R.S.P exceeding Rs.250/- per Kg bag, which has to be adopted for all such clearances of cement made by the appellant for self-use / industrial / institutional consumers. The department was of the view that appellant ought to have affixed RSP on the 50 kg. bags cement and is not eligible for exemption. The appellant was issued show cause notices for different periods from December 2007 to June 2017 alleging that they have wrongly availed the exemption under Sl.No.1C of Notification No.4/2006-CE dt. 1.3.2006 as amended. According to appellant, they had availed the concessional rate of duty for the reason that the cement supplied to industrial / institutional consumers in 50 kg. bags is eligible for exemption as per provision contained in the third proviso to Explanation (2) appended to Sl.No.1C of Notification No....
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....Retail Sale Price on the packages of cement is mandatory under the Standards of Weights and Measures (Packaged Commodities) Rules, 1977 [SWM (PC) Rules, 1997] with some exceptions. In terms of the third proviso to Explanation (2) appended to Sl.No.1C of Notification No.4/2007-CE dt. 1.3.2007 which read as " provided also that where the retail sale price of the goods are not required to be declared under the Standards of Weights and Measures (Packaged Commodities) Rules, 1977, and thus not declared, the duty shall be determined as is in the case of goods cleared in other packed forms". 3. It appeared to the Department that the above proviso is not applicable for the cement sold in bags upto 50 kgs. whether or not for industrial or institutional consumers under Rule 2A of the SWM (PC) Rules, 1977 which is reproduced below: "Chapter - II Provisions applicable to packages intended for retail sale Rule 2A - 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 Litres excluding Cement and Fertilizer sold in bags upto 50 Kg; and (b) pac....
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....ant and these SCNs / SODs were kept in the call book during the pendency of the matter before the Hon'ble Supreme Court. Later, the Hon'ble Supreme Court dismissed the appeal filed by the Department vide order dt. 27.11.2019 which has been accepted by the department. Accordingly, 18 SCNs kept in call book were taken up for adjudication. The adjudication of all 18 SCNs culminated in passing the order impugned herein by which the original authority granted relief to the appellant by dropping the demand in respect of clearances for self-use (SCN No.2/2009 dt. 5.1.2009). However, the demand in respect of clearances for industrial and institutional consumers was confirmed along with interest. The proposal in SCN to impose penalties was also dropped. Aggrieved by such order, the appellant is now before the Tribunal. 7. The details of the show cause notice and the period involved are tabulated below : S. No. SCN / SOD No. File C No. Amount involved 1 SCN No.02/2009 dt. 05.01.2009 December, 2007 to January 2008 V/15/25/01/2009- C.Ex. Adj. III Rs.36,67,079/- 2 SCN No.17/2009 dt. 13.02.2009 February, 2008 to April 2008 V/15/25/15/2009- C.Ex. Adj. III Rs....
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....al consumers during the period from December 2007 to June 2017 on the ground that Appellant was required to statutorily declare RSP on the cement bags and hence, benefit under Sl. No.1C of the Notification No. 4/2006-CE was not available to the Appellant. 8.2 The Appellant filed their replies to the SCNs promptly and requested for an opportunity of personal hearing in the matter. The Appellant is given to understand from the Impugned Order that the SCNs were issued as a protective measure and that the notices had been transferred to the call book. The Appellant was never put to notice of the fact that the demands in the SCNs were transferred to the call book. 8.3 A personal hearing was conducted for adjudicating these SCNs on 30.08.2021. The Appellant was directed to submit evidence to prove that the clearances were indeed made to institutional/industrial consumers, a fact which was not raked up in any of the SCNs. The SCNs culminated in the impugned order wherein the demand of INR 24,01,77,638/- was confirmed along with interest under Section 11AB of Central Excise Act 1944. 8.4 In paragraph 16, the impugned Order has set aside the demand raised in respect of clearances m....
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.... indicates that the word 'and' between the two clauses have to be read disjunctively and not conjunctively. In other words, in respect of both the above categories, the provisions of PC Rules would not apply. The decision in Ultra Tech (supra) has been subsequently followed by the CESTAT in the case of ACC Ltd. vs. CCE - 2018 (359) ELT 572 (Tri.-Chennai) and Viva Dry Mix vs. CCE - 2020 (12) TMI 504 - CESTAT NEW DELHI. A.5. In any case, it is submitted that the clearances made by the Appellant satisfies both the conditions as the cement is packed in bags of 50kg and sold to institutional and industrial consumers. Since both the conditions are cumulatively satisfied the question of invoking the 1977 Rules does not arise. B. The SCNs are vague and are liable to be set aside on this sole ground alone. B.1. It is submitted that where the sale was undertaken by the Appellant in loose or through retail sale by affixing RSP there is no dispute. Further the demand with respect to cement cleared in 50 kg bags for self-use has also been dropped in the impugned order. The SCNs only alleged that cement in 50kg bags were cleared without affixing RSP to institutional/ industrial consumer....
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....s the facts in paragraphs 4 and 9. The sole basis for denying the Appellant the concessional rate of duty was that the conditions in Rule 2A (a) and (b) of PC rules 1977 must be cumulatively satisfied. C.2. In such scenario, the benefit of concessional rate of duty provided under SI. No.1C of Notification No. 4/2006-CE would be available as the Appellant has cleared cement in 50 kgs bags to government companies, construction companies and industrial / institutional consumers. Reliance is placed on the following decisions wherein it was held that the benefit of SI. No.1C of Notification No. 4/2006-CE would be available for clearance of cement made to institutional consumers in 50 kgs bags: i. Prism Cement Ltd. Vs. CCE 2017 (357) ELT 1003 (T.) ii. Diamond Cement Vs. CCE 2017 (352) ELT 177 (T.) iii. Dalmia Cements (Bharat) Ltd. Vs. CCE 2018 (361) ELT 917 (T.) The above decisions were affirmed by Hon'ble Apex court in Commissioner v. Madras Cements Ltd 2020 (371) ELT A42 (S.C.) C.3. The Appellant submits that where the transaction does not qualify to be a 'retail sale' as defined under PC Rules, there was no requirement to affix MRP. In this regard, ....
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....change in personnel in the Appellant and has reduced the adjudication proceedings contemplated under the Act to a mere farce. D.3. Reliance is placed on paragraph 21 of the Order dated 22.11.2023 in Steel Authority of India Limited vs Office of the Commissioner of GST & CE in W.P. No. 12074 of 2023 wherein the Hon'ble Madras High Court held that proceedings could not be allowed to continue after a period of 12 years. It was held that adjudication of proceedings after a long period would cause serious prejudice to the parties and such proceedings are barred by limitation and is unjustifiable. As on date, no revenue appeal has been filed against the Order dated 22.11.2023. D.4. Further Reliance is placed on paragraphs 18, 22, 23 of the decision in Steel Authority of India Limited vs Office of Assistant Commissioner - 2022 (11) TMI 1393- Madras High Court wherein the Hon'ble High Court held that the adjudication of a notice cannot be protracted endlessly for a period of 21 years by relying on the phrase 'where it is possible to do so' in Section 11A (11) of the Excise Act. The Revenue has filed Writ Appeals Nos. 1369,1371,1373,1377,1379 and 1380 which are pending before the Divi....
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....e total demand of differential duty proposed in the SCNs. E.2. The Appellant submits that when there was no requirement to affix RSP on clearances of cement in bulk, the SCNs ought not to have included such clearances in the demand. E.3. Further, the Impugned Order has confirmed the demand on tariff rate, whereas, even if the concessional rate is denied to the Appellant the cement clearances would be amenable to the rate of duty based on Sl. 1A of the NN 04/2006 of Sl. 51 of NN 12/2012-C.E. It is prayed that the appeal may be allowed. 9. Ld. A.R Shri M. Ambe appeared and argued for the Department. The show cause notice dated 5.1.2009 was adverted to by the Ld. A.R to submit that as per Rule 2A of the SWM (PC) Rules, 1977 both the conditions have to be satisfied to be eligible for the concession at Sl.No.1C of Notification No.4/2006. In para-9 of SCN, it is specifically alleged that the appellant failed to affix retail price on the cement bags weighing 50 kgs. 10. In para-10, it has been specifically alleged that even though it is contended by the appellant that they have cleared goods for industrial / institutional consumers it is not known to the department as to wheth....
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....leared in 50 kgs. bags to industrial / institutional consumers and is covered under Sl.No.1C of Notification No.4/2006-CE dated 1.3.2006 as amended. The Tribunal in the case of Grasim Industries Ltd. Vs CCE Trichy - 2009 (238) ELT 655 (Tri.-Chennai) has discussed in detail the issue as to whether R.S.P has to be affixed on cement bags of 50 kgs. And the eligibility of the notification no.4/2006. The said order of Tribunal along with other cases was disposed in the batch cases referred above The relevant part of discussions of the Tribunal in Grasim Industries is as under : "2. The learned Commissioner has demanded duty of over Rs. 2.8 crores from the appellants in respect of cement cleared in 50 Kg. packs to Govt. companies, construction companies and other industrial/institutional consumers during the period May 2007 to February 2008 by denying them the benefit of Notification No. 4/2006-C.E., dated 1-3-2006 (Sl. No. 1C). The learned Commissioner has also imposed equal amount of penalty on them. The Notification, at SI. No. IC thereof, prescribed Rs. 400 per tonne as the rate of duty of excise for goods falling under SH 2523 29 of the CETA Schedule, not covered under Sl. ....
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....ence to the material fact that the cement in question had been cleared to industrial/institutional consumers. The adjudicating authority chose to go by the opinion of the Legal Metrology Department, saying that they were the competent experts to certify such cases. As rightly pointed out by the learned counsel, as the benefit offered under the Notification pertains to goods cleared to industrial/institutional consumers and as this aspect was overlooked by the Legal Metrology expert as also by the learned Commissioner, the impugned order is liable to be set aside. The Board's clarification on the relevant question was wrongly by-passed by the adjudicating authority. We have found favour with the assessee's case in view of the clarification issued by the CBEC, which is to the effect that no RSP requires to be printed on the goods sold to 'industrial/institutional consumers as defined under the rules framed under the Standards of Weights and Measures Act and that such goods would be covered under Sl. No. 1B or 1C of Notification No. 4/2006-C.E. by virtue of the Second Proviso to the Explanation to Sl. No. 1C of the Notification as amended. The Board's clarification squarely covers the....
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....e not required o be declared under the Standards of Weights and Measures (Packaged Commodifies) Rules, 1977, and thus not declared, the duty shall be determined as is in the case of goods cleared in other than packaged form". ... 8. However, the provisions applicable to packages intended for retail sale shall not apply to the following a per Rule 2A of the Standard of Weights and Measures (Packaged Commodities) Rues, 1977. For the sake of convenience, the Rule 2A is reproduced as below : ...... 9. In the instant case, the assesses have cleared cement bags/packages containing 50 kgs. of cement without affixing / printing the Retail Sale Price on packages i.e. in the packages containing 50 kgs. of cement, it is mentioned as "NOT FOR RETAIL SALE, MEANT FOR INDUSTRIAL COSUMER / INSTUTIONTAL CONSUMER /SELF RMC CONSUMPTION". As per Rule 2A ibid, cement and fertilizers sold in bags upto 50 kgs. are excluded from the applicability of the Chapter and hence, the cement bags cleared in 50 kgs without affixing Retail Sale Price by the assessee is not eligible for concessional rate of duty because the provisions of Rule 2A(a) and (b) are to be read together a....
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....tice it can be seen that the case of the department is that as per SWM (PC) Rules the RSP has to be affixed on cement bags of 50 kgs. and that the appellant has cleared cement without affixing R.S.P to industrial / institutional consumers. That they cannot claim benefit at Sl.No.1C of Notification No.4/2006 as it is required to affix R.S.P on the cement bags as per Rule 2A. In para-10 of SCN, there is minor and vague averment that "it is not exactly known whether the appellant has cleared cement to industrial / institutional consumers and therefore the clearances do not fall under the term "industrial or institutional consumer". However, the show cause notice which has been issued after verification of returns / records and accounts of the assessee does not allege anywhere that any such bags which are cleared with the remark affixed "not for retail sale, meant for industrial consumer/institutional consumer/self R.S.P consumption" has been cleared in retail sale. The SCN does not mention about even a single instance of clearances made to retail sale, or any averment as to what is the basis of such averment. The department has to furnish the details of the allegation and basis of the....
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....hether RSP is required to be affixed on 50 kg. cement bags or not. 18. The very same issue in respect of appellant's Trichy unit had come up for consideration before the Tribunal and vide Final Order No.42165/2017 dt. 20.09.2017, the Tribunal set aside the demand taking note of the various decisions passed by the Tribunal as well as the clarification issued by the Board vide Circular No.124/02/2008-CX-3. dt. 12.6.2008. 19. In the case of M/s.Heidelberg Cement (India) Ltd. and Ultra Tech Cement Ltd. Vs CCE - 2021 (8) TMI 251 CESTAT MUMBAI [2015 (315) ELT 53 (Tri.-Mumbai) the issue as to whether both the conditions in Rule 2A has to be read conjunctly or disjunctively was discussed. Relevant para of the order reads as under : "5.6 In the Grasim Industries case (supra), this issue was specifically examined by this Tribunal and it was held as follows :- "As rightly pointed out by the learned Counsel, as the benefit offered under the Notification pertains to goods cleared to industrial/institutional consumers and as this aspect was overlooked by the Legal Metrology expert as also by the learned Commissioner, the impugned order is liable to be set aside. The Board....