Commissioner of Central Excise  & ST, Vadodara-I VERSUS Devram Valji & Co. Pvt. Limited 

CUSTOMS, EXCISE & SERVICE TAX

 APPELLATE TRIBUNAL,

WEST ZONAL BENCH : AHMEDABAD

REGIONAL BENCH – COURT NO. 3

EXCISE Appeal No. 10548 of 2013-DB

(E/CROSS/11156/2013)

[Arising out of Order-in-Original/Appeal No 10-18-DEM-CEX-COMMR-I-BRC-I-2012 dated 30.11.2012 passed by Commissioner of Central Excise, CUSTOMS (Adjudication)- VADODARA-I]

 

Commissioner of Central Excise & ST, Vadodara-I

VERSUS

Devram Valji & Co. Pvt. Limited 

 

APPEARANCE :

Shri Tara Prakash, Deputy Commissioner (AR) for the Appellant Shri Abhishek M. Mehta, Advocate for the Respondent

CORAM: HON’BLE MR. RAMESH NAIR, MEMBER (JUDICIAL) HON’BLE MR. C.L. MAHAR, MEMBER (TECHNICAL)

DATE OF HEARING : 04.07.2023 DATE OF DECISION: 21.07.2023

 

FINAL ORDER NO. 11548/2023 RAMESH NAIR :

This appeal is directed against Order-in-Original No. 10-18-DEM-CEX- COMMR-I-BRC-I-2012 dated 30.11.2012 whereby learned Commissioner (Adjudication) dropped the demand proceedings of the show cause notices. The issue involved in the present case is whether the branded chewing tobacco of 8 gms and 9 gms packing falling under Chapter sub-heading 2403.9910, cleared in a pack of one bag containing 40 packets of the said goods and each pack containing 50 pouches of 8 gms and 9 gms each, are liable to be valued under Section4 or Section 4A of Central Excise Act, 1944.

 

 

2. Shri Tara Prakash, learned Deputy Commissioner (AR) appearing on behalf of the Revenue reiterates the grounds of  He submits that

 

 

since the appellant have packed 50 pouches in one packet, the same should be treated as retail pack and accordingly packet of more than 10gm is liable to be valued under Section 4A and not under Section 4. Accordingly, the Adjudicating Authority has wrongly dropped the proceedings of the show cause notice.

 

3. Shri Abhishek M. Mehta learned Counsel appearing on behalf of the respondent submits that this issue is no longer res-integra as in various cases it was held that even though the packet contains more than 50 pouches but the each pouch is less than 10gms and MRP is affixed on each pouchand not on the packet of 50 or 40 pouches therefore, the same should be valued under Section 4 and not under Section 4A. He placed reliance on the following judgments:-
   • Aroraproduct  CCE, Jaipur – 2012 (276) ELT 77 (Tri. Del.)

 

• MaksonPharmaceuticals (I)  Limited vs. CCE&ST, Bhavnagar – (2023) 8 Centax 4 (Tri. Ahmd.)

 

4. On careful consideration of the submissions made by both the sides and perusal of record, we find that this issue is no longer res-integra as in various judgments this issue is decided that the individual piece, if having less than 10gms even though the number of individual pieces are packed in secondary packet and cleared the individual piece bearing MRP which is havingless than 10gms, shall be considered as retail pack and since it is less than 10gms, the same should not be valued under Section 4A. Accordingly, in the present case also, the individual piece of pouch is of 8gms/ 9gms even though 50 pieces of pouches are packed in one packet, the same should be valued under Section 4 and not 4A for the reason that the each pouch is considered as retail pack and not a packet of 50   Therefore, the

 

 

value should not be governed under Section 4A whereas the same should be governed under Section 4. The very same issue of chewing tobacco was considered by this Tribunal in the case of Arora Product (supra) wherein the Tribunal passed the following order:-

“The appellants are engaged in the manufacture of Chewing Tobacco falling under Sub- heading No. 2404.41 of the First Schedule to the Central Excise Tariff Act, 1985.

2. The officers of the Anti-Evasion Wing of Central Excise Commissionerate, Jaipur- II visited their factory premises by surprise on 29-9-2004 and conducted various checks and found that they manufacture four different types of packages and on the following details were inter alia printed on the pouches and the packages.

 

1.	12 Grms Pouch of NATRAJ Zarda with Chuna	Weight MRP MRP of Multi Piece Package	12 grams Rs. 2/- per pouch Rs. 50/- of 25 pouches
2.	6 Grms Pouch of NATRAJ Zarda with Chuna	Weight M.R.P. MRP of Multi Piece Package	6 grams Rs. 1/- per pouch Rs. 30/- of 32 pouches
3.	3 Grms Pouch of NATRAJ Zarda with Chuna	Weight M.R.P. MRP of Multi Piece Package	3 grams Rs. 0.50 per pouch Rs. 12/- of 24 pouches
4.	6 Grms Pouch of NATRAJ Zarda with Chuna	Weight M.R.P. MRP of Multi Piece Package	6 grams Rs. 1/- per pouch Rs. 35/- of 35 pouches

3. Chewing Tobacco has been notified under Section 4A of Central Excise Act w.e.f. 1-3-2003 vide S. No. 24A of Notification No. 13/2000-C.E. (N.T.), dated 1-3-2002. It was observed that the appellants had cleared Chewing Tobacco and paid Central Excise duty by adopting value as arrived at under Section 4Aof Central Excise Act, 1944 on the basis of MRP on all types of multi-piece packages (3 gms. & 6 gms., 12 gms.) up to 7-3-2004. However, with effect from 8-3-2004 the appellants stopped payment of Central Excise duty adopting value under Section 4A of Central Excise Act, 1944 on multi piece packages containing 3 gms and 6 gms pouches and instead started paying duty adopting value under Section 4 of Central Excise Act, 1944. The appellants continued to pay Central Excise duty on 12 gms. Pouch under Section 4A of Central Excise Act, 1944.
4. Under Rule 34 of Standards of Weights and Measures (Packaged Commodities) Rules, 1977, if any goods are sold by weight and the net content of each of the retail pack is below 10 gms, the manufacturers were not required to affix MRP on such packages. The Appellants were claiming this exemption for items 2, 3 and 4. The SCN raises the issue that these goods were not sold by weight but in terms of number of pouches. Further the SCN alleged that the multi piece packages also were retailpackages and hence under the law the Appellants were required to affix MRP on the multi-piece packages and they were doing so. So the SCN proposed that provisions of Section 4A of Central Excise Act would apply to the multi-piece packages containing individual pouches with content 3 gms and 6 gms and this basis demanded differential duty and interest and also proposed penalty.

 

 

5. The Appellants say that the goods were sold by weight and only individual pouches were meant for retail sale and the multi piece packages were not meant for retail sale.
6. If Revenue’s contention is correct, the Appellant was required under the Standards of Weights and Measures (Packaged Commodities) Rules, 1977 to affix MRP on multi-piece package. If they were required under the law to do so and since the item was notified under Section 4A of the Central Excise Act, assessable value was requiredto be determined as per the provisions of the said Section 4A and central excise duty was to be paid accordingly.
7. If the Appellant’s contention is correct they were not required under the Standards of Weights and Measures (Packaged Commodities) Rules, 1977 to affix MRP on multi-piece package. If they were not required under law to do so, even if they had affixed MRP on the multi-piece packages the provisions of Section 4A would not apply even ifit is a product notified under Section 4A and consequently provisions of Section 4 of Central Excise Act were to apply to such goods like any other case and the Appellants had paid duty accordingly from 8-3-2004. This legal position stands clarified under Circular No. 411/44/98-CX dated 31-7-1998 issued by C.B.E. & C. and a few decisions of the Tribunal and Higher Courts.
8. The adjudicating officer considered the submissions and gave his findings as under :

“A similar question arose before the Hon’ble High Court, Madras as reported in 2004

(163) E.L.T. 160 in the case of Varnica Herbs. In the case cited, herbal hair dye manufactured by the petitioner-assessee were being packed in sachets of 8 gms in weight in Photo Protective Pouch and six such pouches were being packed in a Mono Carton. The contention of the petitioner was that merely because sachets were placed in a mono-carton that would not make the pack a multi-piece package. The assessee also claimed the benefit of exemption under Rule 34 ibid. The Hon’ble Court after considering the matter held that articles kept in separate pouches by the petitioner could be termed as multi piece package in view of provisions contained in Rule 6 ibid, which requires every retail package to contain the net quantity and the maximum retail price read with the definition of multi- piece package given in Rule (j) ibid. The Hon’ble Court has further held that even though the net weight of a commodity might be less than 10 gms., but if it was evident that article was not intended to be sold either by weight or by measure as contemplated under Rule 34(b) ibid, then benefit of Rule 34(b) ibid will not be applicable. The facts of the present case are identical to Varnica Herbs case. In this case also small packs of 3 gms and 6 gms are not intended to be sold either by weight or by measure.”

9. Aggrieved by the order the Appellant filed appeal with the Commissioner (Appeal). The Commissioner (Appeal) confirmed the finding of the adjudicating authority. He also examined the issue whether the multi-piece-package is a retail package and recordedhis finding in para 13 of the order which is reproduced below :

“13. The other point that has been raised is that the appellants were clearing only wholesale packages, that too, only to intermediaries and not to consumers. These wholesale packages or the poly packs containing 32 pouches of 6 gms each, 24 pouches of 3 gms each and 35 pouches of 6 gms each could not be considered multi piece package since they did not intend to sell these poly packs to the retail consumers particularly since the commodity did not have a very high shelf life. It has also been pleaded that no retail sale of the pouches was taking place at the factory gate. As regards retail sale by them at the factory gate, I find that there can be no case where a manufacturer is actually selling its goods directly to the retail

 

 

consumer. The sale has to be through a network of distributors and dealers and retails who will ultimately sell the goods to the ultimate consumer. If the appellants’ contention in this respect is accepted, there would be no way in which assessments under the MRP scheme could be administered. Coming to the point of multi-piece packing, I find it necessary to reproduce the definition of ‘multi piece’ package as under :-

“multi piece package means a package containing two or more individual packaged or labeled pieces of the same commodities of identical quantity, intended for retail sale, either in individual pieces or the package as a whole”.

The definition says ‘intended for retail sale’ either in individual pieces or the package as whole. That means there should be an intention of selling either the package as a whole or as individual pieces, in retail. The condition in which the goods are actually sold is not a pre-requisite for qualifying the definition. I find that the appellants are clearing the packages of smaller pouches in a larger pouch and the individual pieces are meant for retail sale by the retailers. This is a fact which is also not in dispute. It is also a fact that the said larger pouch is also capable of being sold in retail and any consumer who wishes so, can purchase the complete pouches from any retail. The fact that the appellants are selling these goods to the traders does not in any way effect this property of the package. It quite clearly emerges that the package containing number of pouches of chewing tobacco is covered by the definition of multi piece package as contained in the Packaged Commodity Rules. The packages being cleared by the appellants are very much covered by the definition. Circular No. 492/58/99-CX., dated 2-11-1999 issued by the C.B.E. & C. also quite clearly states that declaration of retail sale price of multi piece packages and individual pieces contained in such a multi piece package (if the individual pieces are capable of being sold separately) is statutorily required. The said Circular goes on to state that such packages are required to be assessed in terms of Section 4A of the Act.”

10. Aggrieved by the order of Commissioner (Appeal), this appeal is filed before the
11. TheAppellants rely on B.E. & C. Circular 411/44/98-CX., dated 31-7-1998 :

“Subject : Charaing of excise duty with reference to maximum Retail Price – Reg.

I am directed to say that doubts have been raised as regards charging of excise duty with reference to maximum retail price under Section 4A of Central Excise Act, 1944 in cases where MRP is not required to be affixed on packings, as a statutory requirement under the Standards Weights and Measures Act or any other law for the time being in force, even though some manufacturers may voluntarily be affixing the MRP on such packings.

2. Instructions were issued by the Board vide Letter F. No. 341/64/97-TRU, dated 11th August, 1997 clarifying that sub-section (1) of Section 4A applies onlywhen the MRP is required to be indicated under the provisions of Standards Weights and Measures Act, 1976 or under any other law for the time being in force. In other words, Section 4A applies only when there is statutory requirement of affixing the MRP. Accordingly, in case a manufacturer voluntarily affixes MRP which is not statutorily required then the excise duty on goods in such packings shall not be charged on the basis of Section 4A of the Central Excise Act, 1944.
3. The Commissionersof Central Excise may however require the manufacturers to intimate and declare to the jurisdictional Assistant Commissioner of Central Excise as regards the packings on which MRP is not required to be affixed statutorily may be

 

 

asked to indicate full description including weight, etc. of such packings. It may be examined and ensured by the Assistant Commissioner that the packings are such that they are exempt under the provisions of the Standards Weights and Measures Act and the rules made thereunder. Such packings will be assessed to excise duty under the provisions of Section 4 of Central Excise Act, 1944.

4. The matter has been re-examined and it has been decided to reiterate theabove instruction contained in Board’s Letter F. No. 341/64/97-TRU, dated 11th August, 1997. Accordingly, the instructions dated 30-4-1998 regarding Shampoo sachets communicated to Chief Commissioner, Vadodara and some assessees may be treated to have been withdrawn. Such cases may also be decided in accordance with the instructions contained in this Circular.
5. All pending disputes/assessments on the issue may be settled in the light of these guidelines.
6. Fieldformations and trade may be advised 
7. Receiptof this Circular may please be ”

12. Theyalso rely on the following decisions namely,

• C.E.v. Kraftech Products Inc. – 2008 (224) E.L.T. 504 (S.C.).
• C.E.v. Kraftech Products Inc. – 2005 (179) E.L.T. 43 (Tri-Mum)
• SwanSweets  Ltd. v. C.C.E. – 2006 (198) E.L.T. 565 (Tri-Mum)
• C.E.v. Makson Confectionery Pvt. Ltd. – 2010 (259) E.L.T. 5 (S.C).

13. Per Contra the ld. JCDR points out that in the case of Kraftech Products (supra), was of hair dye packed in individual sachets containing 3 grms and multi piece packet containedthree such packages only and thus the total weight of the multi-piece package itself was below 10 grms which is not the case in this case. The ld. JCDR relies on the decision of Madras High Court in Vernica Herbs C.B.E. & C. – 2004 (163) E.L.T. 160.
14. We have considered the facts of this case and the various decisions of this Tribunal and the Higher Courts quoted by either side.
15. In the case of Kraftech Products – 2008 (224) E.L.T. 504(S.C.) hair dye in 3 grm sachets packed into multi-piece package of three such sachets was under dispute. The Apex Court did not accept the argument that the goods were sold in numbers and accepted the contention of the assessee that the goods were sold by weight. In para 23 the Apex Court observed as under :

“23 We have noticed hereinbefore that each package offered to sell to the customer contains three sachets. Net weight of all the three sachets are stated thereon. It is a “multi-piece package” which is capable of being offered to sell as such only because a package is a “multi-piece package”, the same cannot be taken out of the umbrage of exemption clause contained in Rule 34 of the Rules. Why the commodity cannot independently be sold either by weight or measure is beyond our comprehension particularly when Rule 12(2) permits the same. The illustration appended to Rule 2(j) bring out a clearer picture. It states that the combined net weight shall be taken into consideration for the purposes mentioned therein. After combined weight is taken into consideration for the purpose of applicability of the Rules, there is no reason as to why the said purpose shall not be considered to be a

 

 

relevant factor for applying the exemption provision. Assuming Rule 2(j) was otherwise vague or unambiguous, illustration appended thereto brings out the true meaning and purport thereof. The reasoning adopted by the Madras High Court in Varnica Herbs (supra) does not appeal to us.

It was rendered per incuriam. It was held to be so in Urison Cosmetics Ltd. (supra) by a Larger Bench of the Customs, Excise and Service Tax Appellate Tribunal. We agree with the said opinion of the Tribunal.”

16. The argument that goods are sold by numbers can be raised in respect of commodities like cakesof toilet soap, or tins of talcum powder. But any customer would see the weight of the soap cake or the weight of the contents in a tin of talcum powder before being satisfied about the price for the item. So the argument that such commodities are sold by number is not an acceptable argument. Moreover the Apex Court has specifically overruled the decision of the Madras High Court as explained above. So there is no merit in the argument that the commodity is not sold by weight.
17. In the case of C.E. v. Kraftech Products Inc. – 2005 (179) E.L.T. 43(Tri.-Mum), cachets of hair dye containing 3 grms each was packed into multi-piece package of 3 such units and in this case also the weight of the multi-piece package also was less than the exemption limit prescribed under Rule 34 of the Packaged Commodities Rules.
18. It is to be noted that in the present case the facts are different and the weight of the multi-piece package is not within the exempted limit. So these case laws are not applicable to the facts of the present case.
19. The next issue is whether the multi piece package is a Retail package or not. This matter has been examined at length by the Larger Bench (sic) of the Tribunal in the case of Swan Sweets Pvt. Ltd. In this case chocolates weighing 4 gms each waspacked in a jar of 125 such chocolates. In that case the assessee had not affixed MRP for the jar as a whole. So it was very evident that the manufacturer did not intend the jar to be sold in Retail. Extracts from para 1.2 and para 2.5 of the order are relevant which are reproduced below :

Extracts from para 1.2 of the order :

“(e) The wholesale pack in which the individual Toffy Max Caramel/Chocolate are packed carries, inter alia, the following declaration on it :

 

Wholesale Package
MRP	50 paise per piece (inclusive of all taxes)
Net Weight	500 g (125 Units)
Mfg.	…………
Batch No.	…………”

Extracts from para 2.5 of the order :

“If the plastic jar or plastic bag, in which the Toffees are packed, are packages intended for retail sale, the law requires that the Maximum Retail Price (inclusive of all taxes) of the said jar or bag is to be printed on them. Since the appellants never intended the jar or bag to be sold to the retail consumers as such, the Maximum Retail Price for the bag or jar is not printed on the bag or jar. What is required to be printed on the bag or jar is the MRP for individual Toffee. Thus, the appellants are not printing any price for the whole package. The information given on the bag or jar is only for the dealers or

 

 

distributors, who handle the said bags or jars in the distribution channel. If the appellants had intended the bag or jar to be sold to the retail consumers, they would have printed the price of the bar or jar at one place in a “definite, plain and conspicuous” manner as Rule 6 requires. The PC Rules use the expression “intended for retail sale” at numerous places in order to define whenever and wherever a particular set of information is required to be given on a package. Whether a packaged commodity is intended for retail sale or not will depend on the persons who organize the distribution and sale of the product and on none else.”

20. Thus the labels on the jar clearly indicated that the jar was not intended for retail sale. That is not the situation in the present case. In the present case MRP is indicated for the multi-piece package was indicated on the multi-piece package showing the clear intention that such multi-piece package also was intended for retail sale.
21. ”Retail sale” has been defined under Rule 2(q) of the Standards of Weights and Measures (Packaged Commodities) Rules, 1977. This definition reads as under :

“(q) “retail sale”, in relation to a commodity, means the sale, distribution or delivery of such commodity through retail sales agencies or other instrumentalities or consumption by an individual or a group of individuals or any other consumer”.

22. The declaration to be made on every package is prescribed in Rule 6 of the said Rules reads as under :-

“6.  Declaration to be made on every package –

• Every package shall bear thereon or on a label securely affixed thereto a definite, plain and conspicuous declaration, made in accordance with the provisions of this Chapter as to –
  • the name and address of the manufacturer, or where the manufacturer is notthe packer, of the packer or with the written consent of the manufacturer;
  • thecommon or generic names of the commodity contained in the package;

Explanation :- Generic name in relation to a commodity means the name of the genus of the commodity, for example, in the case of common sale, sodium chloride is the generic name.

• the net quantity, in terms of the standard unit of weight of measure, of the commodity contained in the package or where the commodity is packed or sold by number, the number of the commodity contained in the package;
• themonth and year in which the commodity is manufactured or pre-
• theretail sale price of package;
• where the sizes of the commodity contained in the package are relevant, the dimensions of the commodity contained in the package and if the dimensions of the different pieces are different, the dimensions of each such different piece;
• suchother matters as are specified in these ”

It is to be noted that as per Rule 2A of the said Rules the expression “package” in Rule 6 shall be construed as package intended for retail sale.

23. Soin the case before us the Appellant was required under law to declare MRP on the multi-piece package and the Appellant was doing so. Further this commodity was notified for levy of excise duty based on valuation as per Section 4A of the Central Excise Act. Thus both the legal requirements for applying Section 4A were satisfied and hence Central Excise duty should have been paid adopting the value as per Section 4A.

 

 

24. Consequentlythe Appeal fails and is accordingly ”

The above decision of this Tribunal was upheld by the Hon’ble Supreme Court by dismissing the Revenue’s appeal in Civil Appeal No. 168/2008 by order dated 04.01.2012.

 

 

The identical issue also considered by this Tribunal in the case of Makson Pharmaceuticals (I) Pvt. Limited (supra) wherein the Tribunal passed the following order:-

“06. We have carefully considered the rival submissions and perused the records. The revenue’s appeal is only on the ground that by amendment dated 13.01.2007 in Rule 2(j) of the SWM (PC) Rules, 1977 the earlier judgment in the appellant’s own company is distinguished. In this regard, we reproduce Rule 34 (b) which has prevailed prior to 13.01.2007 and subsequent to that which reads as under:-

Before 13.01.2007

 

Rule 34. Exemption in respect of certain packages Nothing contained in these rules shall apply to any package containing a commodity if,-

 

• …….
• the net weight or measure of the commodity is twenty grams or twenty mililitres or less, if sold by weight or measure.

 

After 13.01.2007

Rule 34. Exemption in respect of certain packages

Nothing contained in these rules shall apply to any package containing a commodity if,-

• …….
• thenet weight or measure of the commodity is ten gram or ten mililitre or less, if sold by weight or measure.

 

In view of the above rule, which was prevailing throughout the period involved in the present case, there is a clear provision that in case of the product of less than 10 grams, there is no requirement for affixing retail sale price. Since in the earlier decision of the Hon’ble Supreme Court it was categorically held that for the purpose of assessment, individual confectionary has to be taken and not the wholesale pack. The individual confectionary is undisputedly below the weight of less than 10 gram and in terms of Rule 34(b) of SWM (PC) Rules, 1977 there is no requirement for affixing the retail sale price. The said product cannot be taken under the ambit of Section 4A of Central Excise Act, 1944.

 

• In revenue’s appeal, emphasiswas made on the amendment of Rule 2(j) of SWM (PC) Rules, 1977, we reproduce the rule prevailing prior to 13.01.2007 and the amended Rule post 13.01.2007.

2. Definitions

In these rules, unless the context otherwise requires-

 

 

(j) “net quantity”, in relation to commodity contained in a package, means the quantity by weight, measure or number of such commodity contained in that package, excluding the packaging or wrapper;]

From the above substitution of Rule 2(j) of SWM (PC) Rules, 1977, we do not find any adverse effect in the principle of law on the issue in hand laid down by the Hon’ble Supreme Court. Despite the substitution of Rule 2(j), the provision of Rule 34(b) of SWM (PC) Rules, 1977 remain intact, according to which there is no requirement for affixing/printing retail sale price on the package of the goods of less than 10 gram therefore, we do not find any substance in the revenue’s appeal. The law laid down by the Hon’ble Supreme court in the appellant’s own case shall continue to be applicable in the present case also. The relevant order of the Hon’ble Supreme Court in the appellant’s own case is reproduced below:-

 

2. In view of the order of this Court dated 15th September, 2008, dismissing CA. No.7559 of 2008 (D.19192/2008) [2008 (232) L.T. A107 (S.C.)], preferred by

the Revenue against the order of the Tribunal in the case of Central Arecanut & Cocoa Marketing & Processing Co-Op. Ltd. v. C.C.E., Mangalore, 2008 (226) E.L.T. 369 (Tri.-Chennai), the issue raised in the appeals is no more res integra. In the said order, the Tribunal relying on its earlier decision in the case of M/s. Swan Sweets Pvt. Ltd. [2006 (198) E.L.T. 565 (Tribunal)], one of the respondents in the present appeals had held that a package containing about 100 or more individual pieces of an article, like „Eclairs‟ brand chocolates etc., each weighing 5.5 grams would qualify for exemption under Rule 34 of the Standards of Weights and Measures (Packaged Commodities) Rules, 1977 and will not attract assessment under Section 4A of the Central Excise Act, 1944.

3. In view of the said decision, with which we are in respectful agreement, there isno merit in these appeals, which are dismissed accordingly, with no order as to

 

Civil Appeal No. 1290/2007

4. In view of the decision of this Court in Civil Appeal No. 7559 of 2008 (D.19192 of 2008), affirming the decision of the Tribunal in the case of Central Arecanut & Cocoa Marketing & Processing Co-Op. Ltd. v. C.C.E., Mangalore, 2008 (226) E.L.T. 369 (Tri.-Chennai), this appeal is dismissed.

Civil Appeal No. 5856/2006

 

5. Having regard to the fact that the revenue involved in the case is stated to be less than Rs. 15,000/-, we decline to entertain the appeal. The same is dismissed accordingly, keeping open the question of law sought to be raised in the appeal.

 

In view of the above order of the Hon’ble Supreme Court, the issue is no more res-integra accordingly, the revenue’s appeal is liable to be dismissed.

• As regard the assessee’s appeal, wherein they have challenged the confirmation of demand by the adjudicating authority under Section 11D, we find that though the appellant have raised invoice showing the total excise duty in terms of Section 4A but since the differential duty demand i.e. between Section 4 and Section 4A was not sustained, the same was held to have been collected by the assessee from their customer accordingly, the demand was confirmed under Section 11D. On thesubmission of the appellant and on the perusal of record, it is clear that the assessee though raised invoices showing duty under Section 4A but in respect of the differential duty they have issued credit note to their customers and consequently the said amount was not collected. In this regard, for ease of reference we reproduce provision of Section 11D as under:-

 

 

 

SECTION [11D. Duties of excise collected from the buyer to be deposited with the Central Government. — (1) Notwithstanding anything to the contrary contained in any order or direction of the Appellate Tribunal or any Court or in any other provision of this Act or the rules made thereunder, [every person who is liable to pay duty under this Act or the rules made thereunder, and has collected any amount in excess of the duty assessed or determined and paid on any excisable goods under this Act or the rules made thereunder from the buyer of such goods] in any manner as representing duty of excise, shall forthwith pay the amount so collected to the credit of the Central Government. [(1A) Every person, who has collected any amount in excess of the duty assessed or determined and paid on any excisable goods or has collected any amount as representing duty of excise on any excisable goods which are wholly exempt or are chargeable to nil rate of duty from any person in any manner, shall forthwith pay the amount so collected to the credit of the Central Government.] [(2) Where any amount is required to be paid to the credit of the Central Government under [sub-section (1) or sub-section (1A), as the case may be,] and which has not been so paid, the Central Excise Officer may serve, on the person liable to pay such amount, a notice requiring him to show cause why the said amount, as specified in the notice, should not be paid by him to the credit of the Central Government.

• The Central Excise Officer shall, after considering the representation, if any, made by the person on whom the notice is served under sub-section (2), determine the amount due from such person (not being in excess of the amount specified in the notice) and thereupon such person shall pay the amount so
• Theamount paid to the credit of the Central Government under [sub-section

(1) or sub-section (1A) or sub-section (3), as the case may be,] shall be adjusted against the duty of excise payable by the person on finalization of assessment or any other proceeding for determination of the duty of excise relating to the excisable goods referred to in [subsection (1) and sub-section (1A)].

• Where any surplus is left after the adjustment under sub-section (4), the amount of such surplus shall either be credited to the Fund or, as the case may be, refunded to the person who has borne the incidence of such amount, in accordance with the provisions of section 11B and such person may make an application under that section in such cases within six months from the date of thepublic notice to be issued by the Assistant Commissioner of Central Excise for the refund of such surplus amount.]

From the plain reading of the above Section 11D, it is clear that the provision of section 11D shall apply only in case where the assessee collects the duty and does not deposit to the government. In the present case, though the appellant have shown the duty in the invoice but at the same time by issuance of the credit note to the customer, said amount was not collected. Moreover, the duty was paid under protest and thereafter credit note was issued. With this fact, it cannot be said that the assessee has collected any duty and the same was not deposited to the government exchequer. In view of this fact only, it is viewed that there is no application of Section 11D in the facts of the present case therefore, the demand confirmed under Section 11D cannot be sustained.

 

6. As a result,revenue’sappeal no. E/1273/2011 is dismissed and assessee’s appeal no. E/1234/2011 is allowed.”

 

5. In view of the above decision and the affirmation of the Hon’ble Supreme Court, the issue is no longer res-integra. Accordingly, the

 

 

impugned order passed by learned Commissioner (Appeals) bears no infirmity and the same is upheld. Revenue’s appeal is dismissed. Cross objection is also disposed of.

(Pronounced in the open court on 21.07.2023)

 

(Ramesh Nair) Member (Judicial)

(C L Mahar) Member (Technical)

KL