Customs, Excise and Gold Tribunal - Mumbai
Cadbury India Ltd. vs Commissioner Of Customs And Central ... on 20 May, 2005
Equivalent citations: 2005(103)ECC78
ORDER Moheb Ali M., Member (T)
1. The stay application arise out of the order of Commissioner (Appeals) Gwalior. In the impugned order the Commissioner held that the appellant is liable to pay differential duty of Rs. 1,28,45,576. He also confirmed the penalty under Rule 173Q imposed by the lower authority to the tune of Rs. 40 lakhs.
2. The facts are that the appellants manufacture products falling under Chapter heading 1804 of the Schedule to the CETA, 1985 and clear them as other goods preparation containing cocoa on payment of duly on the assessable value determined under Section 4 of Central Excise Act. The Department's contention however is that provisions of Section 4A(1) & (2) of the Central Excise Act, are applicable in respect of 'Dairy Milk Eclairs' and are therefore to be assessed on the basis of retail price less permissible abatement in terms of Notification Nos. 9/2000-CE(NT) dated 1.3.2000 and 5/2001-CE(NT). The allegation is that the appellant failed to follow the provisions of Section 4A read with the notification and thereby short paid duty to the extent mentioned above. It is pertinent to mention that the appellant sells his product in different packs of different weights. A Poly pouch of 571 gms. and 591 gms, a Jar pack of 1.21 kg. a Jar pack of 2.505 kg. and Jar pack of 3.08 kgs. are sold as a wholesale packs/jars at a recommended price mentioned on the packs. Duty on these packs/jars is assessed under Section 4 by the appellant as he contends that these packs are wholesale packs as against retail packs of small quantity of Eclairs.
3. The department contends that the jars/packs are being displayed/stored at the retail outlets to sell them as such to the customers and, therefore, these packs fully satisfy the conditions mentioned in Section 2(p) of SWMR (PC) Rules, 1977. The department contends that these are retail packages and the duty on these packages should have been assessed under Section 4A.
4. The Ld. Sr. Advocate for the appellant contends that SWM Act, and the Rules made thereunder do not require MRP to be declared on wholesale packs and, therefore, ex facie Section 4A does not apply to wholesale packs; that the wholesale packs are sold to the wholesalers who in turn sell them to their retailers and the retailers in turn sell the contents to individuals; that as per the Board's Circular No. 411/44/98 CX, dated 31.7.98 Section 4A(1) applies only when the MRP is required to be indicated as per SW&M Act; that on wholesale packages MRP is not required to be indicated under Rule 29; that it is not the intention of the appellant to sell the wholesale package in retail; that principles of natural justice are violated inasmuch as the Commissioner (Appeals) decided the case exparte; that cross examination of the retailers whose statements were relied upon was denied; that the legal opinion of controller of Legal Metrology Department clearly stated that wholesale packs need not bear MRP; that the fact that the State Government has not taken any action against the appellant for not declaring the MRP on such packs is a pointer in the direction that such declaration on the wholesale packs is not necessary; that the impugned goods are assessable under the provisions of Section 4 of Central Excise Act, and that in any case no penalty can be imposed under Rule 173Q when the issue is debatable.
5. The Ld. DR submitted that the Commissioner (Appeals) decided the case after giving plenty of opportunities for personal hearings; that the packages in question do not satisfy the definition of wholesale packs; that once a commodity is notified under Section 4A(1) it is the MRP that should form the basis of assessment; that exception contained in Rule 34 of Packaged Commodity Rules does not apply to the packages in question and that the intention of the appellant that wholesale packages are not meant to be sold in retail cannot be a criteria for determining whether or not Section 4A(1) is applicable.
6. Heard both sides.
7. Section 4A of the Central Excise Act is linked with SW&M Act and the Rules made thereunder. This situation calls for an understanding of the provisions of SW&M Act and the Rules. We have therefore gone through the various Rules of Packaged Commodity Rules. Under Rule 29 of the said Rules wholesale packs need not carry MRP. The appellants call the impugned goods wholesale packs' and print only 'Recommended Price' and argue that since retail price is not printed on the wholesale packs, they do not attract the mischief of Section 4A and, therefore, such packs should be assessed under Section 4.
8. In an identical case in the case of Ravalgaon Sugar Farm Ltd., this Tribunal in its Stay Order No. S/714/WZB/2004-C-II, dated 23.11.04 directed the applicants to deposit Rs. 15 lakhs out of the total duty of Rs. 61,73,236 following the same route we direct the applicant to deposit Rs. 25 lakhs within 8 weeks of the receipt of this order and report compliance on 25.6.05. Upon such deposit further deposit of duty and penalty is waived during the currency of this appeal.