Cce, Jaipur-Ii vs M/S.Arora Products

(Arising out of OIA No.269(HKS)CE/JPR-II/2006 dt.10.4.2006 passed by the CCE(Appeals), Jaipur-II)

Date of Hearing/Decision 21.09.2015

For approval & Signature:

Honble Smt.Sulekha Beevi C.S., Member (Judicial)

Honble Mr.B.Ravichandran, Member (Technical)

1. Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? No 2. Whether it would be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? No 3. Whether their Lordships wish to see the fair copy of the order? seen 4. Whether order is to be circulated to the Department Authorities? yes

CCE, Jaipur-II Appellant

Vs.

M/s.Arora Products Respondent

Appearance:

Present for the Appellant: Shri Govind Dixit, AR

Present for the Respondent: Shri B.L.Narasimhan, Advocate

Coram: Honble Smt.Sulekha Beevi C.S., Member (Judicial)

Honble Mr.B.Ravichandran, Member (Technical)

Final Order No.52942/2015

Per: B.Ravichandran

Revenue is in appeal against the order dated 10.4.2006 of the Commissioner (Appeals).

2. Brief facts of the case are that the respondents are engaged in the manufacture of branded chewing tobacco liable to central excise duty. The respondents are manufacturing lime mixed zarda in 6 gms and 3 gms pouches 24/32/35. Such pouches are packed together into packages and cleared. The issue arose regarding valuation of their products in terms of section 4A of Central Excise Act, 1944. The proceedings were initiated against the respondents which resulted in the Order-in-Original dated 30.11.2005. The original authority held that the respondents are liable to pay central excise duty in terms of section 4A of Central Excise Act, 1944 considering that the packages containing multiple pouches of tobacco are to be considered as multiple unit retail packages and assessment to be done accordingly. He confirmed the demand and imposed penalty. On appeal learned Commissioner (Appeals) set aside the order and allowed the appeal. Learned Commissioner (Appeals) relied on this Tribunals decision in the case of Swan Sweets Pvt.Ltd.,Naxson Foods Pvt.Ltd.,M/s.Makson Confectionary Pvt.Ltd. and M/s.Cadbury India Ltd., vs. CCE, Rajkot/Gwalior [2006-TIOL-229-CESTAT-Mum.]. Aggrieved by this order of the learned Commissioner (Appeals), the Revenue is before us.

3. In the appeal, Revenue contended that small pouches of 6 gms and 3 gms are not being sold by weight or measure. Revenue relied on the decision of Honble Madras High Court in the case of Varnica Herbs-2004 (163) ELT 160 (Madras). It is the Revenues contention that the exemption from declaring MRP on small pouches of 6 gms and 3 gms was not available to the respondent under the provisions of Rule 34 (b) of Standards of Weight and Measures (Packaged Commodities) Rules, 1977. Since MRP was to be declared in such a situation also and accordingly valuation under section 4A is to be done.

4. During the course of arguments, learned AR reiterated the grounds of appeal and stated that the respondent is liable to pay central excise duty in terms of section 4A. Learned Counsel for the respondent contended that the factual position that they were packing chewing tobacco in pouches of 3 gms and 6 gms which are intended for sale in retail to the ultimate consumer, has not been disputed by Revenue. Revenue has not been able to establish that the packages containing multiple pouches of 6 gms or 3 gms of tobacco are sold to the retail customer in normal course. Revenue case is only on the ground that larger package of the respondent, referred to as second packing or multiple piece package is intended for sale as unit in retail and MRP is required to be declared on these packages. Accordingly assessment is to be done under section 4A. Learned Counsel argued that such assertion by the Revenue is devoid of merit and is contrary to the facts as admitted in the proceedings before the lower authorities. He further pleaded that reliance placed by the Revenue on the decision of Honble Madras High Court in Varnica Herbs is no more relevant as the same has been overruled by Honble Supreme Court in CCE, Vapi vs. Krafttech Products-2008 (224) ELT 504 (SC). Honble Supreme Court favoured the larger bench decision of this Tribunal in the case of Urison Cosmetics Ltd.-2006 (198) ELT 508 (Tri.-LB). The Tribunal in the said order held that Honble High Court decision in the case Varnica Herbs (supra) was per incuriam. Learned Counsel also relied on the decision in the case of Miraj Products vs.CCE, Jaipur-2008-TIOL-2841-CESTAT-DEL.

5. Heard both sides and examined the appeal records. The point for decision is that the respondents liability to discharge central excise duty under section 4A. Learned Commissioner (Appeals) relied on the decision of this Tribunal in Makson Confectionary Pvt.Ltd. and held that the present case is similar to the one decided by the Tribunal and as such the respondent would not be covered under section 4A. We find that the said decision of this Tribunal has been upheld by the Honble Supreme Court-2010 (259) ELT 5 (SC). The Tribunal observed in Swan Sweets Pvt.Ltd.-2006 (198) ELT 565 (upheld by the Honble Supreme Court) (supra), the crucial point for determining whether the assessments are to be done under section 4A or whether subject goods are required to be declared MRP under Standards of Weight and Measures Act, 1976 or rules made thereunder. The wholesale packages are defined under Rule 2(x) of Standards of Weight and Measures (Packaged Commodities) Rules, 1977. The Tribunal further examined the definition for multiple piece package under Rule 2(j) and retail package under Rule 2(p) of the said rules. Since packages under which the products were sold by the respondent clearly fall within the exemption provided under Rule 34(1) (b) of the said rules, the Tribunal in the said decision held that section 4A has no application. We find that the facts of the present are similar to the one discussed above. Accordingly, we find that there is no reason to interfere with the impugned order. Accordingly the appeal filed by the Revenue is dismissed.

(pronounced in open court)

(B.Ravichandran) (Sulekha Beevi C.S) Member (Technical) Member (Judicial)

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