TaxTMI 
TaxTMI 
2005 (7) TMI 121
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....002-C.E., dated 1-3-2002 as amended by Notification No. 6/2003-C.E., dated 1-3-2003. The Notification benefit was available to Vanaspati, Bakery Shortening, Margarine and other edible preparations. However, in case the goods bear a brand name and are put up in unit containers and meant for retail sale, the exemption would not be available. The impugned goods, no doubt, bear a brand name and are put up in unit containers. However, there is a label indicating that the goods are meant for Bakery/Catering Industry use. It is further indicated that the impugned goods are 'not for retail sale'. The appellants contend that they are entitled for the exemption on the ground that the impugned goods are not meant for retail sale but, the Revenue, is of the view that the goods are sold to consumers and, therefore, the sale is a retail one. The appellants rely on a number of case laws. Revenue also relies on certain case laws. We have to examine all the case laws to arrive at a proper conclusion. M/s. Steel Complex Ltd. : In this case, the appellants declared a price, which is different from what is shown in the commercial invoice. The appellants supply steel products to Government Units. The....
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...., normally wholesalers do not sell directly to consumers. (a) The Hon'ble Supreme Court in the case of Collector of Central Excise, Madras v. Abex Rubber Co. - 1998 (99) E.L.T. 489 (S.C.) held that there is no presumption in law that a sale to an industrial consumer must be in bulk and the price charged must be in wholesale price. Any such inference will have to be drawn from the facts of the case. In the same decision, it has been observed that, "There is no dispute that bulk sale to a single consumer may constitute wholesale sale and the price for such sales should be taken as the normal price basis for determining the assessable value of the goods." From the above observations, it is evident that in order to decide whether a transaction is a wholesale transaction or retail transaction, one has to examine the facts of the case. During the hearing, an impression was created by the learned Advocate for M/s. Hindustan Lever Ltd., that in view of the Abex Rubber decision, the quantity of sale is irrelevant to decide the question of wholesale or retail. We are afraid that this is not correct. There cannot be a general proposition that sale to....
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....by them for sale. Transport Undertakings fit them to their vehicles which ply on commercial basis. The fact that the element of direct re-sale (of tyres, tubes purchased from MRF) may be absent in the case of such buyers would not detract from the position that such purchases (and MRF sales to them) are not purchases (sales) in retail." We infer from the above observations, that quantum of sale is very relevant. The erstwhile Section 4(4)(e) defines 'wholesale trade' as follows : '"Wholesale trade" means sales to dealers, industrial consumers, Government, local authorities and other buyers, who or which purchase their requirements otherwise than in retail'. (emphasis supplied) In other words, any supply to dealers, industrial consumers, Government, local authorities can be considered as wholesale trade provided they do not purchase in retail quantity. The purchase must be otherwise than in retail. The fact of a sale being wholesale does not depend on to whom the goods are sold but how much is sold. (d) In the case of D.C.W. Ltd. v. Collector of Central Excise - 1992 (62) E.L.T. 153 (Tribunal), the point that Industrial Consumers are a....
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..... - Bang.), it has been held that material exclusively used for industrial purposes but also capable of being used as consumer goods are not covered under consumer goods even if they are not further processed. In the case of CC, Mumbai v. Jaysons Hard Metals P. Ltd. - 2003 (155) E.L.T. 193 (Tri. - Mum.), it has been held that goods will not become consumer goods merely because of being packed in a particular manner. In the case of Telco Ltd. v. CC, Mumbai - 2003 (158) E.L.T. 621 (Tri.), it has been held that packing is not determinative of whether goods are for industrial application or consumer goods. The learned Advocate relied on these case laws for contending that mere packing is not an indication for determining the nature of the goods. In the case of Hercules Rubber Co. v. CCE - 1984 (18) E.L.T. 479 (T), the distinction between the industrial consumer and individual consumer has been clearly brought out. "The distinction between an industrial consumer and an individual consumer is not one without difference. While there can be sale by the manufacturer in retail in terms of Rule 6 of the Central Excise (Valuation) Rules, 1975, such a sale cannot be to an industrial consumer b....
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....ctured as per specifications of customers and sold directly to them for their own use should be treatable as a retail sale irrespective of whether some customers purchased more than one truck. While coming to the above conclusion the Tribunal has observed the following :- "Considering the factual position in the present set of appeals, undisputedly, there is no sale to any dealer. It is not the allegation from the department that any of the customers under consideration has purchased the trucks for effecting any further sale. They all appear to have purchased them to be used in their normal activities, and the nature of transaction between the appellants and the consumers clearly indicates the sale in the nature of retail sale. Separate sale transactions have been entered into with each individual consumer, at the price negotiated and with modifications supply of extra accessories as desired by each one of them. These are the major criteria which exist in the retail transactions and are generally absent in the wholesale trade, where general requirements of the consumers at large, as against specific requirements of each individual consumer, are considered. The sale transactions, t....
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.... not amount to wholesales sale, but only retail sale. In Sanghi Oxygen case it has been held - "3. Where the industrial consumer purchases in wholesale, he has to be regarded as wholesaler for the purpose of Section 4(4)(e) of the Central Excises Act. We say so since "wholesale trade" has been defined in Explanation to wholesaler trade as; sales to dealers, industrial consumers, Government, local authorities and other buyers, who or which purchase the requirements otherwise than in retail. Where there are industrial consumers who buy their requirements in wholesale, they form a separate class of buyers as contemplated in proviso (i) to Section 4(1)(a) and in respect of goods sold to them a different assessable value can be arrived at but this cannot apply to stray case where industrial consumers buy goods in retail since such industrial consumers cannot be regarded as wholesale dealers." 6. A very careful examination of all the case laws cited indicate that each case has been decided based on the facts of that case. In other words we do not really find any contradiction or inconsistencies in the light of the facts of each case. However, while examining the definition of wholesale....
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....iples, it is seen that in the case of M/s. Hindustan Lever Ltd., the goods are supplied to baking/catering industry for their exclusive use. It has also been clearly mentioned in the label that the items are 'not for retail sale'. Applying the case laws cited above we find that the goods are not meant for the use of the ultimate consumers. They are meant only for the bakery/catering industry. By no stretch of imagination it can be construed that these items are sold in retail quantity. In view of the above findings, the appeal is allowed. 8. As regards the case of M/s. Steel Complex, all the case laws relied on by the learned advocate refer to the sale of photocopiers/forklifts/motor cycles etc., to the ultimate consumers. In these cases it has not been established that the buyers purchase in bulk. Even when a Government department purchases a photocopier it may be either one, two or three. It cannot be in very huge quantities. But in the present case, the appellant company supplied steel to different Government companies in bulk. The case of the appellants is that the steel purchased by the Government companies is not for resale but only for their own consumption. According to th....