M/S Ashoka Boot Factory vs Cce, Kanpur

[Arising out of the Order-in-Appeal No. 45-53/CE/Appeal/Knp/ 2011 dated 24/02/2011 passed by The Commissioner (Appeals), Customs & Central Excise, Kanpur.]

For Approval and signature :

Honble Shri Rakesh Kumar, Member (Technical)

Honble Shri S.K. Mohanty, Member (Judicial)

1. Whether Press Reporters may be allowed to see :

the Order for publication as per Rule 27 of the

CESTAT (Procedure) Rules, 1982?

2. Whether it would be released under Rule 27 of :

the CESTAT (Procedure) Rules, 1982 for

publication in any authoritative report or not?

3. Whether their Lordships wish to see the fair :

copy of the order?

4. Whether order is to be circulated to the :

Department Authorities?

Shri Suresh Kumar, Manager ]

M/s Brite Shoe Factory ]

M/s Delhi Footwear ]

M/s New Advance Shoe Factory]

M/s Ashoka International ]

M/s Ashoka Boot Factory ] Appellants

Shri Sunil Gupta, Partner ]

M/s Rajiv Shoe Factory ]

M/s D.B. Footwear ]

M/s Combat Boot Company ]

M/s Mahajan Boot Factory ]

Versus

CCE, Kanpur Respondent

Appearance

Ms. Surbhi Sinha, Advocate for Shri Suresh Kumar, Manager, M/s Brite Shoe Factory, M/s D.B. Footwear, M/s Combat Boot Company and M/s Mahajan Boot Factory and

Shri P. Chetan, Advocate for M/s Delhi Footwear, M/s New Advance Shoe Factory, M/s Ashoka International, M/s Ashoka Boot Factory, Shri Sunil Gupta, Partner and M/s Rajiv Shoe Factory  for the Appellants.

Shri Yashpal Sharma, Authorized Representative (DR)  for the Respondent.

CORAM : Honble Shri Rakesh Kumar, Member (Technical)

Honble Shri S.K. Mohanty, Member (Judicial)

Final Order No. 50432-50442/2015 Dated : 11/02/2015

Per. Rakesh Kumar :-

The appellant companies are manufacturers of footwear. All of them were supplying footwear to Defence organisations at DGS&D rate which was less than Rs. 250/- per pair. The supplies were being made by availing full duty exemption under Notification No. 5/06-CE dated 01/3/06 (Sl. No. 5) which prescribes nil rate of duty for the footwear of RSP not exceeding Rs. 250/- per pair subject to condition that the retail sale price is embossed or indelibly printed on the footwear itself. In this case there is no dispute that the retail sale price of the footwear supplied, in respect of which exemption was claimed, is less than Rs. 250/- per pair and except for one case there is no dispute that the price was marked indelibly or embossed on the footwears themselves. In one case, the Director of the appellant company had initially stated that the RSP was not being marked or embossed on footwear but subsequently he retracted his statement. The main ground for denial of the exemption is that since the sales are to institutional buyers and, therefore, there is no requirement for printing the MRP, the MRP must not have been marked. It is on this basis that by the orders passed by the original adjudicating authority, by denying the duty exemption under Notification No. 5/06-CE (Sl. No. 5) duty demands of various amounts have been confirmed against the appellant companies alongwith interest on it under Section 11AB and penalties have been imposed on the appellant company and their Directors. The orders passed by the original Adjudicating Authority were upheld by the Commissioner (Appeals) by two separate orders against which these appeals have been filed.

2. Heard both the sides.

3. Ms. Surabhi Sinha, Advocate, the learned Counsel for the appellant, pleaded that in this case, the dispute is only about eligibility of the shoes supplied to Defence organisations for duty exemption under Notification No. 5/03-CE (Sl. No. 5), that there is no dispute that the shoes supplied were of retail sale price not exceeding Rs. 250/-, that dispute is only on the point as to whether as per the condition of the exemption notification, the retail sale price was marked or not, that except for one case where the Director of the appellant company had given a statement that the price was not being marked, in other cases, there are no such statements, that in the case where the Director of the appellant company had initially given a statement that the price was not being marked, that statement was subsequently retracted by him, there is no seizure of the shoes supplied by the appellant, without RSP printed/embossed on them, that the only basis for denial of exemption is that supplies are to institutional buyers and in terms of the provision of Standard of Weights and Measures Act and the Rules made thereunder, there is no requirement for printing MRP on the goods sold to institutional buyers, that the provisions of Standards of Weights and Measures Act and Rules made thereunder are of no relevance for complying with the condition prescribed in the Notification No. 5/06-CE (Sl. No. 5), that while the notification, for availing nil rate of duty, prescribes the condition that the MRP must not be more than 250/- per pair and the same should be printed indelibly or embossed on the footwear and since both the conditions stand satisfied, the duty exemption cannot be denied, more so, when the Department has not produced any evidence that the price was not indelibly printed or embossed on the footwear and that in view of this, the impugned orders are not correct.

4. Shri Yashpal Sharma, the learned DR, defended the impugned order by reiterating the findings of the Commissioner (Appeals).

5. We have considered the submissions from both the sides and perused the records.

6. There is no dispute that the shoes were supplied to Defence organisation at DGS&D rate and the retail price of the shoes so supplied is less than Rs. 250/- per pair. The only point of dispute as to whether the retail price was indelibly printed or embarks on the shoes. In this regard, only in one case, the Director of the appellant company had initially given the statement that the price was not being printed or embossed but he has subsequently retracted his statement. Other than this, there is no evidence that the appellant were not complying with this condition. The Department mainly relying upon the Standards of Weights and Measures Act and the Rules made thereunder which provide that in respect of sales to institutional buyers there is no requirement to print the MRP on the retail packs, has inferred that MRP was not printed/embossed. In our view the provisions of Standards of Weights and Measures Act and the Rules made thereunder have no reliance for complying with the conditions of this exemption notification. Even if in respect of a product being supplied to institutional buyers, there is no requirement to print the MRP in terms of Standards of Weights and Measures Act and the Rules made thereunder, but if for availing nil rate of duty or concessional rate of duty under some exemption notification, there is a condition that such retail price must be printed or embossed, the assessee would have to comply with that condition for availing the exemption even if this is not required for compliance with the provision of Standards of Weights and Measures Act and the Rules made thereunder. In this case the Department has not recovered any consignment of shoes supplied to Defence organisations on which there is no MRP printed and as such there is absolutely no evidence that the appellant were not complying with this condition of exemption notification. In view of this, just because the shoes were supplied to Defence organisation, which according to the Department are institutional buyers, it cannot be presumed that no MRP had been printed or embossed on the footwear. In view of this, we hold that the impugned orders denying the benefit of exemption Notification 5/06-CE dated 01/3/06 (Sl. No. 5) are not sustainable. The same are set aside. The appeals are allowed.

(Dictated and pronounced in open court.)

(Rakesh Kumar)

Member (Technical)

(S.K. Mohanty)

Member (Judicial)

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