TaxTMI 
TaxTMI 
TaxTMI 
2025 (10) TMI 129
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....Chennai Port and Bangalore and these components / spare parts which are sent to their marketing network across the country for further sale to said customers failed to discharge applicable duty under Section 4A of the Central Excise Act, 1944, investigation was initiated and on conclusion of the same, demand notice was issued to the appellant on 30.05.2013 for recovery of the differential customs duty of Rs.2,72,36,253/- for the period from April 2010 to November 2011 along with applicable interest and penalty. On adjudication, the demand was confirmed with interest and penalty. Hence, the present appeal. 3.1. At the outset, the learned advocate for the appellant has submitted that the goods imported by the appellant are spare parts of goods manufactured by them like dumpers, motor graders, Tatra trucks, water sprinklers and these goods have only industrial application. He has submitted that the goods imported as spare parts by the appellant are supplied only to industrial consumers either during warranty period or otherwise as spare parts. He has submitted that the imported spare parts / components are repacked at the marketing division with the labels bearing the name of the a....
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.... states that if the packaged commodities meant for industrial consumers or institutional consumers, then irrespective of the quantity cleared, the provisions of Chapter II are not applicable. He has submitted that it is not in dispute that the imported goods were sold to various industrial consumers either directly or through distributor / dealer and are not meant for sale to retail consumers; the nature of imported goods is such that they are not capable of being used by retail consumers. 3.3 It is also submitted that the substitution of Rule 2(bb) of the PC Rules by way of substitution has retrospective effect in view of the judgment of the Hon'ble High Court of Karnataka in the case of CCE Vs. Fosroc Chemicals (India) pvt. Ltd. [2015(318) ELT 240 (Kar.)]. Learned advocate for the appellant has further submitted that in the absence of any machinery provisions to alter the RSP declared by the importer, no proceedings can be initiated against them. Reliance has been placed on the judgment of this Tribunal in the case of Deepak Sharma Vs. CC, Mumbai [2018(10) TMI 769 - CESTAT MUMBAI]. 3.4. Further, they have submitted that the duty demand is completely barred by limitation sin....
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....ased by the industrial consumers from the manufacturer and the appellant being an importer, the sales/clearances made directly or through their distributors to the industrial consumers cannot fall within the definition of 'industrial consumers' even if such goods are ultimately consumed by industrial consumers. Against the said finding of the adjudicating authority, the categorical plea of the appellant through their reply to the show-cause notice as well as before the adjudicating authority was that at the time of import itself in the Bills of Entry, it has been categorically made clear through the declaration that the imported goods are not meant for retail sale; hence they were not required to affix the RSP on the packages even though in some packages the RSP was affixed at the time of clearance as insisted by the department. 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 so....
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....ility 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 litre excluding cement and fertilizer sold in bags up to 50 Kg; and (b) packaged commodities meant for industrial consumers or institutional consumers. Explanation. - For this 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,....
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....ment of the Bombay High Court in the case of Larsen & Toubro Limited v. The Union of India in W.P. No. 5856/07 disposed of on 29-2-2008 [2012 (275) E.L.T. 153 (Bom.)], where, after noticing Rule 2-A and the 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 tha....
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.... clear. This Act is meant only for an individual consumer or a group of individuals who purchase packaged commodities from a retail dealer. To protect their interest, this Act and Rules are enacted and compliance 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 industr....