CX - There is no evidence on record to show that 'multi piece package' is ever intended to be a retail package for a retail consumer – no cause for valuation u/s 4A: CESTAT
By TIOL News Service
NEW DELHI, SEPT 04, 2017: 22 appeals have been filed by the Revenue contesting the dropping of demand of differential CE duty [period 14/01/2007 to 09/03/2010]and one appeal by the assessee [Period August 2005 to 13/01/2007]contesting the imposition of penalty.
The assessee is engaged in the manufacture of branded chewing tobacco.
The nature of packing and practice of sale as captured in the SCN is –
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S. No.
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Description printed on multipiece packages
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Description printed on each pouch
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1.
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NATRAJ Lime mixed Zarda Net Weight : (10gm x 27) When packed MRP (Rs. 2/- per pouch) Max. Unit Sale Price (Rs. 2/- x 27 pouch)
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NATRAJ Lime mixed Zarda Net Weight 10 gms when packed M.R.P. Rs. 2.00
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2.
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NATRAJ Lime mixed Zarda Weight : (4gm x 32) MRP (Rs. 1/- per pouch) Max. Unit Sale Price (Rs. 1/- x 32 pouch)
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NATRAJ Lime mixed Zarda Net Weight 4 gms when packed M.R.P. Rs. 1.00
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3.
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CLASSIC NATRAJ tobacco Lime mix Weight : (5gm x 40) MRP (Rs. 1/- per pouch) Max. Unit Sale Price : Rs. 40/- for 40 pouches)
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CLASSIC NATRAJ tobacco Lime mix Net Weight 5 gms when packed M.R.P. Rs. 1.00
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The notices proposed assessment of impugned goods in terms of Section 4A holding that the appellant/assessee cleared branded chewing tobacco in multi-piece retail packages and, as such, the assessment is to be done under the said section. The demands were confirmed by the original authority.
In appeal,the Commissioner (Appeals) held that the appellant/assessee is liable to assess the impugned goods in terms of Section 4A upto 13/01/2007 and thereafter in terms of Section 4 of the CEA, 1944. For the period prior to 13/01/2007 he confirmed a differential duty of Rs. 10,74,940/- and imposed a penalty of Rs. 5,37,470/- under Rule 25 of CER, 2002.
As mentioned, appeals have been filed by Revenue and the assessee.
In the grounds of appeal the Revenue mainly contested the findings in the impugned order on the premise that the packages containing multiple pieces of identical packets of chewing tobacco are to be considered as a retail package.
The Bench considered the submissions made by both sides and inter alia observed –
++ We find the facts recorded in the notice itself will indicate that each one of the package having less than 10 gms. of chewing tobacco has contained all the details as per the statutory requirement like contents and unit price etc.
++ Even the larger packages containing multiple pieces of such small packages, indicated the MRP of individual small package only. It is categorically asserted by the appellant/assessee that the bigger package containing multiple pieces of small retail package never carry any MRP for the sale of such package.
++ In other words, there is no evidence on record to show that the larger package '(multi piece package)' is ever intended to be a retail package for a retail consumer. In the appeals by the Revenue also no such factual assertion or supporting evidence has been recorded.
++ Consequent upon deletion of the provision of Rule 2 (j) and Rule 17 of Packaged Commodities Rules w.e.f. 14/01/2007 the impugned order correctly applied the legal provisions to determine the principles of valuation.
In fine, holding that there is no merit in the appeal(s) filed by the Revenue, the same were dismissed.
As regards the appeal by the assessee against imposition of penalty, the CESTAT held that the issue is one of interpretation of legal provision including the statutory requirements as per Legal Metrology Department and, therefore, there is no reason for imposition of penalty. The appeal was partly allowed.
(See 2017-TIOL-3199-CESTAT-DEL)
