Custom, Excise & Service Tax Tribunal
Cavinkare Pvt. Ltd vs Commissioner Of Central Excise on 5 October, 2016
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH CHENNAI Appeal Nos.E/246/2005 & E/247/2005 [Arising out of Order-in-Original No.13/2004 dt. 14.12.2004 passed by the Commissioner of Central Excise, Pondicherry,] 1. CavinKare Pvt. Ltd. 2. Carista Herbal Products (P) Ltd. Appellant Versus Commissioner of Central Excise, Pondicherry Respondent
Appearance:
Shri S. Muthuvenkatraman, Advocate For the Appellant Shri K.P.Muralidharan, AC (AR) For the Respondent CORAM :
Honble Shri D.N. Panda, Judicial Member Hon'ble Shri Madhu Mohan Damodhar, Technical Member Date of hearing / decision : 5.10.2016 FINAL ORDER No.41878-41879/2016 Per D.N. Panda Appellant says that the goods viz. Hair Dye with the brand name "Indica" were cleared in retail packs containing 6 gms. each and six numbers of such pack were placed in mono-carton for convenience of sale. Appellant cleared the goods claiming its duty liability shall be determinable under Section 4 of the Central Excise Act, 1944. But Revenue alleged that it is out of the purview of that section and shall be covered by Section 4A of the said Act since the goods were cleared for retail sale.
2. Appellant's further submission is that reading of Rule 34 of the Standards of Weight & Measures (Packaged Commodities) Rules, 1977 (1977 Rules, for short) during the material time excluded applicability of the 1997 Rules in respect of the commodity, if the net weight or measure of the commodity was 20 grams or 20 milli litres or less, when those were sold by weight or measure. Appellant also pleaded that once the goods are covered by the above rule, the 1977 Rules is not applicable to such goods and clearance thereof to be treated in multi-piece packs attracting Section 4A of the Central Excise Act, 1944. To support such contention, appellant, relies on the decision of the Apex Court in the case of CCE Vapi Vs Krafttech Products 2008 (224) ELT 504 (SC).
3. Heard both sides and perused the record.
4. In so far as the facts depicted at the outset are concerned, there is no dispute by Revenue. The legal dispute of Revenue is that the goods of the above nature and description are not exempt under Rule 34 of the 1977 Rules. In view of no factual difference raised by Revenue, proposition of the assessee on the point of law is considered for the purpose of decision in the present appeals.
4.1 No doubt, the goods were in retail pack covered by a mono-pack carton. What that was cleared was mono-pack carton but not the retailable goods. Rule 34 of the 1977 Rules at the material time very specifically states that the goods weighing less than 20 grams or less than 20 milli litres when sold by weight or measure, are out of the purview of 1977 Rules.
4.2 In the present case, the categorical fact finding by the Authority below is that the appellants had cleared 6 gms. sachet of the Hair Dye in a monopack carton containing six numbers of such sachet. The weight of goods in individual sachet satisfies the condition of Rule 34 of 1977 Rules. Therefore, goods of appellant are covered by Rule 34 of the 1977 Rules and enjoy exemption from application of the 1977 Rules. Once there is an exemption, the judgement of the Apex Court in the case of Krafttech Products (supra) shall apply. It is relevant to reproduce paras-15, 21 and 23 of the judgement of the apex court in Kraftech Products (supra) to appreciate the law on the subject and meaning of the term "multi-piece package", as well as applicability of Rule 34 and exemption granted by that rule as under:-
"15.?It is beyond any doubt or dispute that the commodity in question is being sold in multi-piece package. Identical quantity of commodity is packed in each sachet. Yet again admittedly three sachets are packed in one packet. The weight of three sachets is 9 gms, that is, less than the prescribed weight of 10 gms.
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21.?Rule 34(b) provides for exemption from the application of the Rules. The expression contained therein that nothing contained in these rules shall apply to any package containing a commodity is of wide amplitude. There cannot be any doubt whatsoever that Rule 34 would apply in a case of this nature if it is sold by weight or measure. The respondents not only do so, they are permitted to do in terms of Schedule V read with sub-rule (2) of Rule 12 of the Rules.
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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.
5. Revenue says that legal Metrological Department has opined that the goods in question being 5.6 gms. each that ipso facto cannot be considered to be a multi-piece package. We are not guided by this opinion of the Metrology authority in view of factual finding of the adjudicating authority as to the weight of the sachet and clearance of six numbers of sachets packed in mono-pack carton attracting Rule 34 of the 1977 Rules, being a pack of 6 gms. in each sachet. That gets exemption from the application of the 1977 Rules. Accordingly, the goods cleared by appellant are to be assessed under Section 4 of the Central Excise Act without the same assessable under Section 4A thereof on the facts and circumstances of the case.
6. In view of the relief granted in the principal appeal as above, penalty imposed on M/s. CavinKare Pvt. Ltd. is waived and its appeal allowed.
In the result, both the appeals are allowed.
(Dictated and pronounced in open court)
(MADHU MOHAN DAMODHAR) (D.N.PANDA)
TECHNICAL MEMBER JUDICIAL MEMBER
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