Custom, Excise & Service Tax Tribunal
M/S.Unipatch Rubber Ltd vs C.C.E., Indore on 24 October, 2016
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL,
WEST BLOCK NO.2, R.K. PURAM, NEW DELHI-110066
BENCH-DB
COURT III
Excise Appeal No.E/56005/2013-EX [DB]
[Arising out of Order-in-Original No.118-119/COMMR/IBD/ CEX/ 2012 dated 19.11.2012 passed by the Commissioner (Appeals), Customs, Central Excise and Service Tax, Indore]
M/s.Unipatch Rubber Ltd. Appellant
Vs.
C.C.E., Indore Respondent
Present for the Appellant : Mr.B.L.Narasimhan, Advocate
Present for the Respondent: Mr.Amresh Jain, D.R.
Coram: HONBLE MR. S.K. MOHANTY, MEMBER (JUDICIAL)
HONBLE MR. B.RAVICHANDRAN, MEMBER (TECHNICAL)
Date of Hearing/Decision: 24.10.2016
FINAL ORDER NO. 54560/2016
PER: B.RAVICHANDRAN
The appeal is against the order dated 19.11.2012 of Commissioner of Central Excise, Indore. The appellants are engaged in the manufacture of Tem Adhesive C liable to Central Excise Duty. The dispute in the present case is relating to the liability of appellant to discharge duty for the said goods under the provisions of Section 4 or Section 4A. It is the claim of the appellant that they are covered by the provisions of Section 4A, as the impugned products are notified under the Standard of Weights and Measures (Packaged Commodities) Rules, 1977. However, the Revenue entertained a view that they are liable to discharge duty under Section 4, as the impugned product can only be used by an industrial /institutional buyer. Proceedings were initiated against them to demand differential duty which resulted the impugned order confirming a demand of Rs.60,73,926/- and imposition of equal amount of penalty.
2. Ld. Counsel for the appellant submitted that the whole issue revolves around the contention of the Revenue that the product is usable only by tyre re-treading industry and as such, cannot be covered under Section 4A as P.C. Rules will not apply to the impugned goods. It is the case of the appellant that they have never sold the impugned goods directly to any of the institutional/industrial consumers. All their sales were to/through their dealers only, who in turn sell the products to various consumers. In such situation, it is submitted that the provisions of Rule 2 A of the P.C. Rules, 1977 are not attracted and as such, their valuation under Section 4A is correct.
3. Ld. AR contested the submissions of the appellant. He submitted that the nature of the product is such that it is always used by an industrial or an institutional consumer only. The ultimate consumer being an institutional or industrial consumer they are excluded from the definition of retail package under Rule 2 (p) of P.C. Rules. When it is clearly known that the product can only be used by industrial user, there can be no retail transaction attracting the provisions of P.C. Rules.
4. We have heard both the sides and perused the appeal records. The Revenue seeks to assess the impugned goods under the provisions of Section 4 on the ground that the product is of such nature, that can be used only by industrial consumer, namely, tyre re-treading units. This apparently is the only reason on which the assessment followed by the appellant in terms of Section 4A is sought to be varied. We find that the appellants made categorical assertion, which is not rebutted with evidence, that they have never sold directly to any consumers, leave-alone, Institutional/Industrial consumers. All their sales are to dealers only. We find in such situation the exclusion made under Rule 2 A of P.C. Rules is not applicable to the present case. The said Rule defines institutional/industrial consumer who buy package commodities directly from the manufacturers. P.C. Rules will not apply to such transaction.
5. Further, we notice that in the present case the impugned goods are cleared in packages of size covered by the P.C. Rules and there is no endorsement on the packages to the affect that the goods are not meant for resale. We note that the Tribunal in the case of H&R Johnson India Pvt. Ltd. - 2015 (319) ELT A-227 (SC) & 2014 (306) ELT 645 (Tri. Mumb.) held that in the absence of such endorsement, it cannot be said that the goods are cleared for institutional/industrial consumers. The said decision of the Tribunal has been affirmed by the Honble Supreme Court in 2015 (319) ELT A-229 SC and has been followed in the other decision of the Tribunal in Nico Tiles v. CCE, Raigar, 2015 (315) ELT 296 (Tri.-Mum.) & SPL Ltd. vs. CCE, Rohtak, Final Order No. A/53548/15-EX. (DB).
6. In view of the above discussion and analysis, we find the impugned order cannot be sustained. Accordingly, the same is set aside. The appeal is allowed.
[Dictated and pronounced in the open Court)
(B. RAVICHANDRAN) (S.K. MOHANTY)
MEMBER (TECHNICAL) MEMBER (JUDICIAL)
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