Custom, Excise & Service Tax Tribunal
Commissioner Of Central Excise, ... vs M/S Arvind Footwear Pvt. Ltd on 6 September, 2016
IN THE CUSTOMS, EXCISE AND SERVECE TAX APPELLATE TRIBUNAL, WEST ZONAL BENCH AT MUMBAI COURT NO. IV APPLICATION NO. E/CO/149/06-Mum APPEAL NO. E/4145/05-Mum (Arising out of Order-in-Appeal No. SVS(124)85/2005 dated 12.09.2005 passed by the Commissioner of Central Excise & Customs (Appeals), N-5, CIDCO, Aurangabad.) For approval and signature: Honble Mr. Ramesh Nair, Member (Judicial) Honble Mr. C.J. Mathew, 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 : No 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, Aurangabad Appellant Vs. M/s Arvind Footwear Pvt. Ltd. Respondent Appearance: Shri M.P. Damle, Assistant Commissioner (A.R.) for Appellant Shri Sachin S. Kulkarni, Advocate for Respondent CORAM: HONBLE SHRI RAMESH NAIR, MEMBER (JUDICIAL) HONBLE SHRI C.J. MATHEW, MEMBER (TECHNICAL) Date of Hearing: 06.09.2016 Date of Decision: 26.09.2016 ORDER NO. Per: Ramesh Nair:
This appeal is directed against Order-in-Appeal No. SVS(124)85/2005 dated 12.09.2005 passed by the Commissioner of Central Excise & Customs (Appeals), N-5, CIDCO, Aurangabad.
2. The issue involved in this case is whether in the case where the footwear supplied to industries would be valued under Section 4 or Section 4A of Central Excise Act, 1944 when the package of footwear bearing of MRP. The adjudicating authority while adjudicating the show-cause notice on the above issue held that the footwear supplied to the industries would be valued under Section 4 on the ground that the supply made to industry is in bulk. Therefore there is no requirement to declare the retail sale price in the bulk sale to industrial buyers. Accordingly the demands of differential Excise duty were confirmed. Being aggrieved by the Order-in-Original the appellant had filed an appeal before the Commissioner (Appeals), who allowed the appeal both on merits as well as on limitation. Being aggrieved by the impugned order the Revenue has filed this appeal.
3. Shri M.P. Damle, Assistant Commissioner appearing on behalf of the Revenue submits that the supply of footwear in bulk, there is no retail sale of the footwear therefore the valuation of footwear is covered under Section 4 of Central Excise Act, 1944 and not at MRP under Section 4A. He placed reliance on the judgment of this Tribunal in the case of Bharti Systel Ltd. Vs Commissioner of Central Excise, Chandigarh-I [2002 (145) ELT 626 (Tri.-Del.).
4. On the other hand, Shri Sachin S. Kulkarni learned Counsel for the respondent taking support from the impugned order, submits that the Section 4A will apply only in such cases where it is mandatory requirement to affix the MRP on the packages of product. In the present case as per the clarification issued by Assistant Controller of Legal Metrology, Ahmednagar, even in the case where the supply of packaged goods are involved, the respondent is liable to affix the price on packages as per The Standards of Weights & Measures (Enforcement) Act, 1985 Section No. 33 read with The Standards of Weights & Measures (Packaged Commodities) Rule, 1977 Rule 6(i)(f), Rule 2(r). Accordingly, the exemption provided under Rule 34 of The Standards of Weights & Measures (Packaged Commodities) Rule, 1977 is not applicable in case of footwear supply to industries. He placed reliance on the Hon'ble Supreme Court judgment in the case of Commissioner of Central Excise, Panchkula Vs. Liberty Shoes Ltd. [2015 (326) ELT 422 (S.C.)].
5. We have carefully considered the submissions made by both the sides. We find that there is no dispute in case that footwear supply in packages to the industries is not eligible for exemption provided under Rule 34 of The Standards of Weights & Measures (Packaged Commodities) Rule, 1977. If this is so, then the supplier is required to affix the MRP statutory on each package of product. When the requirement to affix the MRP on packaged goods is made under Section 4A of Central Excise Act, 1944 the valuation of the said goods shall be covered by Section 4. It is also fact that the footwear supplier affixing the MRP on each package of each footwear, the respondent supplied to their industrial buyer. We are of the opinion that the footwear, even though the supply in bulk but in absence of exemption provided under Rule 34 of The Standards of Weights & Measures (Packaged Commodities) Rule, 1977. The valuation of footwear shall be correctly made under Section 4A and not under Section 4 of the Central Excise Act, 1944. Hon'ble Supreme Court judgment in the case of Liberty Shoes Ltd. (supra) directly applies in the fact of the present case. The Hon'ble Supreme Court has held as under:-
12.?Once we find that the footwear is an item which is specified under Section 4A, which is covered by Weights and Measures Act and Rules, and MRP was affixed on the products supplied, which were not exempted under Rule 34 of the Rules, the provision of Section 4A of the Act shall stand attracted.
13.?The issue is no more res integra and has been elaborately dealt with by this Court in Jayanti Food Processing (P) Ltd. v. Commissioner of Central Excise, Rajasthan [2007 (8) SCC 34 = 2007 (215) E.L.T. 327 (S.C.)] in the following terms :-
32.?It is true that if the unamended section is to be made applicable, the ice cream pack of four litres would certainly be covered under Section 2-A. However, Rule 3 explains that provisions of Chapter II would apply to packages intended for retail sale and expression package wherever it occurs in the Chapter shall be construed accordingly. It is, therefore, clear that the package which was sold by the assessee could not be termed as retail package nor the sale thereof be termed as a retail sale and as such there was no requirement of mentioning the retail sale price on that package. All this has been completely missed in the order of the Tribunal.
33.?On the other hand the package in question would certainly come within the definition of wholesale package as defined in Rule 2(x)(ii) as it contained the commodity (ice cream) and was sold to intermediary (hotel) for selling the same to the consumer in small quantities. Then Rule 29 would apply to such package which does not require the price to be displayed on the package. What is required to be stated in (a) name and address of the manufacturer, (b) identity of commodity, and (c) total number of retail packages or net quantity. Shri Ravinder Narain is quite justified in relying on Rule 2(x) and Rule 2(q) (sic 29). The Tribunal does not refer to these vital Rules.
34.?There is one more substantial reason supporting the appellant. Shri Ravinder Narain invited our attention to Rule 34 in Chapter V of the SWM (PC) Rules which provides for exemptions. We have quoted Rule 34 earlier. The Rule has now been amended. However, under the unamended Rule there is a specific declaration that the SWM (PC) Rules shall not apply to any package containing a commodity if the marking on the package unambiguously indicates that it has been specially packed for the exclusive use of any industry as a raw material or for the purpose of servicing any industry, mine or quarry. Learned counsel points out that the package which is sold by the assessee mentions that it is specially packed for the exclusive use of the catering industry.
35.?Learned counsel further argues that such package was for the purposes of servicing the hotel industry or catering industry as the case may be. Learned counsel is undoubtedly right when he seeks to rely on Rule 34 which provides for exemption of the packages which are specially packed for the exclusive use of any industry for the purposes of servicing that industry. Shri Subba Rao supported the view expressed by the Tribunal that the words servicing any industry could not cover the present case and he further suggested that ice cream cannot be a raw material for any industry. He is undoubtedly right that ice cream cannot be termed as raw material for any industry. However, the words or for the purposes of servicing any industry are broad enough to include the transaction in question i.e., the sale of a pack of ice cream to the hotel industry. Hotel does not manufacture the ice cream and is dependent entirely upon the sale of ice cream to it by the assessee for ultimately catering the commodity in the package i.e., ice cream to the ultimate consumer. In our view this can be squarely covered in the term servicing any industry. The word service is a noun of the verb to serve. This Court in Coal Mines Provident Fund Commr. v. Ramesh Chander Jha in a different context, observed as under : (SCC p.592, para 7) 7.?The word service in Section 2(17)(h) must necessarily mean something more than being merely subject to the order of the Government or control of the Government. To serve means to perform function; do what is required for. ????????????????????(emphasis supplied)
14.?We, thus, do not find any error in the judgment of the CESTAT. The instant appeals are, accordingly, dismissed.
6. From the above settled legal position by the Hon'ble Supreme Court and as per above discussion made herein, we are of the considered view that the order passed by the learned Commissioner (Appeals) is just and legal which does not need any interference. The impugned order is upheld and appeal is dismissed.
(Pronounced in Court on 26.09.2016) (C.J. Mathew) (Ramesh Nair) Member (Technical) Member (Judicial) Sp 2 APPLICATION NO. E/CO/149/06-Mum APPEAL NO. E/4145/05-Mum