Commissioner Of Central Excise vs Vyankatesh Udyog

IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL,WEST ZONAL BENCH AT MUMBAI

COURT No. II

APPEAL No.E/577/07

(Arising out of Order-in-Appeal No.SVS/29/NGP-B/2007 dated 16/01/2007 passed by Commissioner of Central Excise (Appeals), Nagpur)

For approval and signature:

Honble Mr. Anil Choudhary, Member (Judicial) Honble Mr. Raju, Member (Technical)

1. Whether Press Reporters may be allowed to see :No the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

2. Whether it should be released under Rule 27 of the :Yes CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3. Whether Their Lordships wish to see the fair copy :Seen of the Order?

4. Whether Order is to be circulated to the Departmental :Yes authorities? ========================================

Commissioner of Central Excise, Nagpur Appellant

Vs. Vyankatesh Udyog Respondent

Appearance:

Shri.V.K.Shastri, Asst. Comm. (AR) for appellant Shri.G.L.Deshpande, Advocate for respondent

CORAM:

Honble Mr.Anil Choudhary, Member (Judicial) Honble Mr. Raju, Member (Technical)

Date of Hearing : 10/09/2015 Date of Decision : 10/09/2015

ORDER NO

Per: Raju

1. The appellants are manufactures of Printing ink and ink reducer falling under Chapter Heading No.3215 & 3814 of the Schedule to the Central Excise Tariff Act, 1985. The appellants were engaged in manufacture and supply of ink producer on the value arrived at under Section 4A of the Central Excise Act, 1944. After claiming the abatement of 40% of the MRP on the packages. It was alleged that the provisions of Section 4A are applicable to only those goods for which it was mandatory to print MRP under the Standard Weights and Measurements Act, 1976 (SWMA) or Rules made therein or any other law for the time being in force. It was alleged that as per Rule 34 of the Standards of Weights and Measurements (Packaged Commodities) Rules 1977, the goods specially packed for exclusive use in any industry as raw material are exempted from declaring retail sale price on packages and therefore, were examined from the printing of MRP under the said Rules. A notice was issued on the aforesaid grounds and the same was confirmed by the Additional Commissioner. The appellant went in appeal to the Commissioner (Appeals) who set aside the order-in-original and appeal of the appellant was allowed.

2. The Commissioner (Appeals) relied on the decision of this Tribunal in the case of Electrolux Kelvinator Ltd., Vs. CCE, Nagpur  2005 (179) ELT 214 (Tri-Mumbai) wherein following has been observed:

2. After hearing both sides and considering the material on record it is found :

(a) Sale of refrigerators to soft drink manufacturers, are sold in bulk, there is no retail sale. The matter of application of Section 4A assessment in such case is now well settled, in favour of the appellant, by the decision in the case of ITEL Industries - 2004 (163) E.L.T. 219 (T) in that case the assessee sold telephone instruments to DOT/MTNL in bulk with MRP affixed on them. Who in turn lent the instruments to subscribers & was no sale in retail.

(b) CCE (Appeals) holding that the refrigerators are not sold by the appellants in Retail and since goods are sold in bulk to the soft drink manufacturers therefore provision of Section 4A cannot be applied cannot be upheld since liability to declare the Maximum Retail Price (MRP) exists and exemption under the Standard of Weights and Measures Act, and the rules made thereunder is available to goods specially packed for the exclusive use of any industry or service in mines or quarry. In the present case the goods are sold with MRP without any special packaging indicating an use as Raw material or for use in service industry. Rule 34 (a) framed under the Standards of Weights & Measures Act is not applicable. The appellants are statutorily required to declare a MRP on the Refrigerators, have done so, therefore they cannot be denied the benefit of Section 4A assessment.

(c) The reliance of the lower authority that subsequently the appellants have stated paying duty under Section 4 cannot be a ground to levy duty under Section 4 when as per law it should be under Section 4A.

3. The Commissioner (Appeals) relied on Rule 34 of Standards of Weights and Measures (Pack Comm.) Rules, 1977, which read as under:

Chapter V Exemptions:

Exemption in respect of certain packages  34 (1) nothing contained in these rules shall apply to any package containing a commodity if 

(a) the marking on the package unambiguously indicates that it has been specifically packed for the exclusive use of any industry as a raw material or for the purpose of servicing any industry, mine or quarry.

He observed that:

7.9 It is clear from the above that it is essential if above marking is one package then there is exemption from marking the package with the maximum retail price otherwise not. In the show cause notice there is no allegation that the marking as required under Rule 34 of Standards of Weights and Measures (Pack Comm.) Rules, 1977 was there on the packages cleared by the appellant.

4. Revenue is in appeal against the said order of the Commissioner (Appeals). The appeal of the Revenue was primarily on the ground that the order of Electrolux Kelvinator Ltd. (supra) relied upon by the Commissioner has been challenged in the Honble Supreme Court and the same has been admitted.

5. Learned AR relies on the grounds of appeal.

6. Learned Counsel for the appellant informed that the decision of this Tribunal in the case of Electrolux Kelvinator Ltd. has been affirmed by the Honble Supreme Court in Jayant Food Processing (P) Ltd. Vs. CCE, Rajasthan  2007 (215) ELT 327 (SC).

7. We have through the rival contentions. We find that the Commissioner (Appeals) in his order has been specifically observed as under:

Chapter V Exemptions:

Exemption in respect of certain packages  34 (1) nothing contained in these rules shall apply to any package containing a commodity if 

(b) the marking on the package unambiguously indicates that it has been specifically packed for the exclusive use of any industry as a raw material or for the purpose of servicing any industry, mine or quarry.

He observed that:

7.9 It is clear from the above that it is essential if above marking is one package then there is exemption from marking the package with the maximum retail price otherwise not. In the show cause notice there is no allegation that the marking as required under Rule 34 of Standards of Weights and Measures (Pack Comm.) Rules, 1977 was there on the packages cleared by the appellant.

8. The facts are similar to the decision of this Tribunal in the case of Electrolux Kelvinator Ltd. (supra). Since the Honble Supreme Court has affirmed the decision in the case of Electrolux Kelvinator Ltd. (supra), the appeal filed by the Revenue is dismissed.

(Pronounced in Court)

(Anil Choudhary) Member (Judicial) (Raju) Member (Technical)

pj

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Appeal No.E/577/07