TaxTMI 
TaxTMI 
2025 (6) TMI 1605
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of Rs.29,15,893/- along with interest and penalty. On adjudication, the demand was reduced to Rs.27,45,664/- and the same was confirmed with interest and penalty. Aggrieved by the said order, they filed appeal before the learned Commissioner(Appeals), who in turn, upheld the order of the adjudicating authority. Hence, the present appeal. 3.1. Assailing the impugned order, the learned advocate for the appellant has submitted that the MRP based assessment for levy of additional duty of customs is carried out when the goods are notified in the official gazette as per Section 4A(1) of the CEA, 1944 read with Notification No.49/2008-CE, and retail sale price (RSP) is required to be declared on the imported package under Legal Metrology Act, 2009 and rules made thereunder. She has submitted that under the provisions of the Standards of Weights and Measures Act, 1976 / Legal Metrology Act, 2009, RSP is required to be declared on the pre-packed commodities where (i) the packages are intended for retail sale; (ii) packages do not contain quantity of more than 25 Kgs or 25 litres and (iii) the packages are not meant for industrial consumers or institutional consumers. 3.2. Learned adv....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r industrial use only; not for retail sale. In such circumstances, even if the goods are sold by the importer to industrial consumers/ institutional consumers or through their distributors, the provisions of MRP based assessment is not applicable. This issue is no more res integra and considered by this Tribunal in the case of Kluber Lubrication India Pvt., Ltd. Vs. CC (supra). Taking note of the principles of law on the subject and also the judgment of the Hon'ble Karnataka High Court in the case of EWAC Alloys Ltd. (supra), this Tribunal observed as follows:- "8. We have carefully analysed the allegation in the show- cause notice and finding recorded by the Ld. Commissioner. It is nowhere alleged in the notice that even though the appellant had made a declaration in their Bills of Entry that the goods are 'not for retail sale'; however, the goods, instead of clearance to industrial consumers, have been sold in retail to the ultimate consumers. On the contrary, it is alleged in the show- cause notice that the importer in relation to the goods covered under the Bill of Entry was not an industrial/institutional consumer hence the goods imported by them attract application o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....odities meant for industrial consumers or institutional consumers. Explanation. - For the purpose of this rule. (a) Institutional consumer.- Means those consumers who buy packaged commodities directly from the manufactures/packers for service industry like transportation [including airways, railways] hotel or any other similar service industry. (b) Industrial consumer.- Means those consumers who buy packaged commodities directly from the manufacturers/packers for using the product in their industry for production, etc.]" 25. Therefore, while interpreting these provisions, one has to keep in mind what was the law prior to deletion to clause (a) of Section 34 and what is the law after introduction of Rule 2-A and substituting the definition 2(p)-'retail package'. As is clear from Rule 2-A, Chapter II deals with provisions applicable to packages intended for retail sale. This provision is not applicable to two categories of packaged commodities, as mentioned in clause (a) and (b). As the words industrial consumer or institutional consumer were used in clause (b) of Rule 2- A, in the explanation, the meaning of those two terms have been expressly sta....
X X X X Extracts X X X X
X X X X Extracts X X X X
....definition of 'retail package' as contained in Rule 2(p), it was held that the explanation of institutional and industrial consumer in Rule 2-A must also be read into the proviso to Rule 2(p), for the purpose of Chapter II. While construing Rule 3, only purchasers of packages who are institutional or industrial consumer as explained under Rule 2-A would be excluded. Every other retail sale by a retail dealer of a pre-packed commodity would be covered. 28. With great respect, I find it difficult to fully agree with the reasoning in the aforesaid judgment because, as is clear from Rule 2-A, the explanation expressly states that 'For the purpose of this rule' and then gives the meaning of institutional consumer and industrial consumer. On the date of Rule 2A was introduced by way of amendment into the Rules, Rule 2(p) was also substituted introducing the very same words 'industrial consumer and institutional consumer' in the proviso. If the intention of the legislature that the same meaning given in the explanation is to be attributed to the definition clause also, they would not have used the word, 'this rule', they would have used the word 'Rule'. Thus it amounts to re-writ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nce of Rule 6 was made mandatory. The proviso contained in the definition of 'retail package' as per Rule 2(p) defines the ultimate consumer, which shall not include industrial or institutional consumers. Therefore, it is clear that the protection under this Act is confined only to individuals and persons who are eking out livelihood by self-employment and not to institutional and industrial consumers or consumers who purchase goods in large quantities. Therefore, requirement of Rule 6 is not required to be complied with by a manufacturer who sells his packaged goods to an industrial or institutional consumer through a stockist." 11. The learned Commissioner has concluded interpreting the relevant provision of Legal Metrology (Packaged Commodities) Rules, 2011 that since the appellant is an importer and not an industrial or institutional consumer, even though declared in each and every Bills of Entry that the goods were not meant for retails sale and cleared to industrial consumers, hence the goods imported by them attract the provisions of Legal Metrology (Packaged Commodities) Rules, 2011. As observed earlier it is clear that the respective employees whose statements rec....