Customs, Excise and Gold Tribunal - Delhi
Jayanti Food Processing Pvt. Ltd. vs Commissioner Of C. Ex., Jaipur on 10 January, 2002
Equivalent citations: 2002(80)ECC219, 2002(141)ELT162(TRI-DEL)
ORDER
K.K. Usha, J. (President)
1. The appeal at the instance of the assessee is directed against the common order passed by the Commissioner (Appeals) dated 25-5-2001 dismissing three appeal Nos. 200/III/2000, 377/VII/2000 and 378/VII/2000 filed by the appellant. Challenge in these appeals was against Orders-in-Original dated 28-2-2000,18-4-2000 and 27-4-2000 respectively.
2. The appellant is engaged in the manufacture of ice-cream falling under sub-heading 2105 of the Central Excise tariff Act, 1985. The issue that arises for consideration in this appeal is whether in respect of 4 ltrs. pack of ice-cream manufactured by the appellant duty has to be assessed under Section 4 or Section 4A of the Central Excise Act, 1944. Show cause notices were issued to the appellant directing it to show cause why duty on 4 ltrs. pack (bulk pack) of ice-cream should not be charged on the value determined under Section 4A of the Act read with Notification No. 20/99-CE. (N.T.), dated 28-2-99. The appellant contended that Packaged Commodity Rules, 1977 (hereinafter referred to as P. C. Rules) are applicable only to packaged commodities which are intended or likely to be sold in such packaged form, the bulk pack of 4 ltrs. is not meant to be sold in such pack in retail, there is a clear printed notation on the package that 4 ltrs. packs are not meant for retail sale at all and that the pack is meant to be opened up and scooped and filled in cones when ice-cream reaches the ultimate consumer and it is not at all sold and delivered in any package form but in unpacked form and, therefore, they are not obliged to print the MRP on 4 ltr. package. Affixing the MRP on 4 ltr. pack was voluntarily done by the appellant. They also contended that they are entitled to exemption under Rule 34 of the P. C. Rules. These contentions were not accepted by the original authority as well as the appellate authority. Aggrieved by the above the assessee has come up in appeal.
3. Ice-cream that is manufactured by the appellant is sold to M/s. Hindustan Lever Ltd. who, in turn, supplies the same to various dealers. Such dealers sell the same to retailers. Admittedly, the appellant had submitted a list of MRP in respect of different varieties of ice-cream and the assessments in respect of those are made under Section 4A of the Central Excises Act. As mentioned earlier the dispute is only with respect to 4 ltrs. pack. Sub-section (2) of Section 4A provides that where the goods specified under Sub-section (1) namely the goods in respect of which it is required under the provisions of the Standards of Weights and Measures Act, 1976 and the Rules made thereunder to declare MRP on the package, are excisable goods, the value shall be deemed to be the retail price declared on such goods. It is contended by the appellant that 4 ltrs. bulk pack does not come under Section 4A in view of the notation on the pack "especially packed for catering industry -not for retail sale". He submits that the above marking would take the package out of the provisions of PC Rules. Chapter II of die above rule contains provisions applicable to packages intended for retail sale. Rule 3 provides that the provisions of this Chapter shall apply to packages intended for retail sale and expression "package", wherever it occurs in the Chapter shall be construed accordingly. Since 4 ltrs. pack is not intended for retail sale, the provisions of Chapter II including Rule 6 which contains a direction for declaring the retail sale price of the package will not be applicable to the goods concerned. In order to explain the meaning of the term "intended for sale", the learned Counsel placed reliance on a decision of the Supreme Court in H.H. Maharaja Rana Hemant Singhji v. CIT - 1976 (103) ITR 61 and also a decision of the Bombay High Court in G.S. Poddar v. Commissioner of Wealth-tax, Bombay -1965 (57) ITR 207. It is contended that what is to be examined is whether the manufacturer intended 4 ltr. pack for retail sale and not whether it is capable of being sold in retail.
4. To appreciate the above contention we may have to examine certain other provisions of the PC Rules also. Rule 2(p) defines "retail package" as follows:
'"retail package" means a package containing any commodity which is produced, distributed, displayed, delivered or stored for sale through retail sales, agencies or other instrumentalities for consumption by an individual or a group of individuals.' The term "retail sale" is defined under Rule 2(q) as follows :-
'"retail sale", in relation to a commodity means the sale, distribution or delivery of such commodity through retail sales agencies or other instrumentalities for consumption by an individual or a group of individuals or any other consumer "Retail sale price" is defined under Rule 2(r) as follows :-
'"retail sale price" means the maximum price at which the commodity is packaged form may be sold to the ultimate consumer and where such price is mentioned on package, there shall be printed on the packages the words ("Maximum or max. retail price...... inclusive of all taxes or in the form MRPRs.....incl., of all taxes".).
Explanation : For the purposes of the clause "maximum price" in relation to any commodity in packaged form shall include all taxes, local or otherwise, freight, transport charges, commission payable to dealers, and all charges towards advertisement, delivery, packing, forwarding and the like, as the case may be,' The above definitions would make it clear that the package need not contain material for the consumption of a single individual. We therefore find no merit in the contention of the appellant that the 4 ltr. pack is not meant for consumption of one individual but it is meant to be consumed by more than one person by serving the same to such persons after unpacking. According to us it would still come under the definition of the term "retail package" as it is produced and distributed for consumption by a group of individuals. Therefore, we are of the view that the two decisions relied on by the appellant will not be of any help to them in the facts of this case.
5. The next question to be considered is whether the appellant is entitled to exemption under Rule 34 of the PC Rules. Relevant portion of Rule 34 is reproduced below :
"34. Exemption in respect of certain packages. - Nothing contained in these rules shall apply to any package containing a commodity if, -
(a) the marking oh 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:
Provided that this exemption shall not be available in respect of -(i) any yarn which is sold in hanks to handloom weavers;
(ii) any component, part or material used in any workshop, service station or any other place where servicing or repairing of any bicycle, tricycle or motor vehicle within the meaning of Motor Vehicles Act, 1939 (4 of 1939), is undertaken;
(iii) any package containing a commodity of net content of 5 kilogram or 5 litre or less and displayed for sale at the retail outlet;
(iv) any package containing a commodity to be sold by number or length and displayed for sale at the retail outlet."
According to the appellant, since the Revenue has not proved that the 4 ltr. packs have been displayed for sale at the retail outlet its case will not come within Clause (iii) of the proviso. Clause (a) of Rule 34 exempts certain packages from the provisions of PC Rules. They are packages containing a commodity with a marking on the package unambiguously indicating 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. First we have to consider whether 4 ltr. pack of ice-cream would come within the exemption clause in view of the marking on the carton "Especially packed for catering industry not for retail sale". As mentioned earlier, the 4 ltr. pack ice-cream manufactured by the appellant is also sold to M/s. Hindustan Lever Ltd. who, in turn, supplies the same to various dealers and ultimately from the dealers it reaches the retailers. The package does not contain a commodity which is a raw material for any industry. The only other question which is to be considered is whether it is meant for purposes of servicing any industry, mine or quarry. Even if we are to take that the hotel or catering can be taken as an industry, it is not possible to hold that the commodity packed is intended for serving an industry in the sense it is used in Clause (a) along with mine or quarry. Apart from the above, there is no material available in this case to substantiate the contention raised by the appellant that the 4 ltr. ice-cream package is ultimately utilised exclusively in hotel or catering industry. Since according to us it does not come with the exemption clause itself, there is no need to examine whether the package would come within Clause (iii) of the proviso.
6. In the light of the above discussion, we uphold the findings in the impugned order and dismiss the appeal.