Custom, Excise & Service Tax Tribunal
The Commissioner vs M/S India Cements Ltd on 14 July, 2016
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL REGIONAL BENCH AT HYDERABAD Bench Division Bench Court I Appeal No.E/2330/2010 (Arising out of Order-in-Appeal No.15/2010(H-III)(D)CE, Dated 30-07-2010 passed by Commissioner of C.CE&ST(Appeals-III) Hyderabad) For approval and signature: Honble Ms. Sulekha Beevi, C.S., Member(Judicial) Honble Mr. Madhu Mohan Damodhar, Member(Technical) 1. Whether Press Reporters may be allowed to see 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 CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? 3. Whether their Lordship wish to see the fair copy of the Order? 4. Whether Order is to be circulated to the Departmental authorities? The Commissioner. C&C.E, Hyderabad-III ..Appellant(s) Vs. M/s India Cements Ltd. ..Respondent(s)
Appearance Shri Ajay Kumar, AR for the Appellant Shri S.Muthu Venkatraman, Advocate for the Respondent Coram:
Honble Ms. Sulekha Beevi, C.S., Member(Judicial) Honble Mr. Madhu Mohan Damodhar, Member(Technical) Date of Hearing : 14/07/2016 Date of decision: 14/07/2016 FINAL ORDER No._______________________ [Order per: Madhu Mohan Damodhar,]
1. The assessee/respondent filed claim on 21-07-2009 for refund of Rs.1,43,64,127/- contending that (a) they have been paying excise duty @ Rs.350/- per MT on despatches of cement meant for A.P.State Housing Corporation Ltd. as per notification No.04/2006.CE dated 01-03-2006 as amended (b) that they were directed by the department vide Letter C.No.V/12/25/15/2007-P&I dated 16-11-2007 to pay @ Rs.400/- per MT in lieu of Rs.350/- per MT for the said supply of cement (c) that in compliance to the above directions, they had paid the differential duty of Rs.50/- per MT UNDER PROTEST from 03/2007 onwards till date and they continued to pay at the above rate (d) that the Commissioner of Central Excise (Appeals) Hyderabad-III, has set aside the Order passed from this office confirming rate of duty to be paid for such cement supplies to M/s APSHC and confirmed the applicability of exemption as per above notification Viz. Rs.350/- per MT and allowed the appeal with consequential relief to M/s Sagar Cements Ltd. and to M/s India Cements Ltd., their own unit, and that the above order has been accepted by the department and reached finality that they confirm that they had not passed on the incidence of the differential excise duty paid by them under protest to their customers and submitted a copy of their audited account schedules, duly signed by their auditors in support of their claim.
2. The refund was sanctioned by Assistant Commissioner vide Order dated 20-10-2009. Aggrieved, the department filed an appeal before Commissioner (Appeals), who vide order dated 30-07-2010 upheld the refund sanction order and dismissed the appeal. The department is now in appeal before the Tribunal.
3. The main grounds of appeal preferred by the department are as follows:-
3.1 As per the Boards clarification dated 12-06-2008, the RSP is not required to be printed on the package if it falls under any one of the three categories mentioned therein. In the instant case, the sale is to M/s APSHCL which can be categorized as an industrial Consumer in as much at M/s APSHCL are buying the goods ie. Cement directly from the assessee and using the same for construction of houses. Further, as per various statutes, construction has to be treated as an industry and this issue was neither discussed nor disputed by the appellate authority, the views of whom were concurred by the CESTAT.
3.2 Further, the retail sale is defined in Rule 2(q) of the Standards of Weights and Measures(packaged commodities) Rules, 1977 and the same is reproduced hereunder for ready reference:
retail sale, in relation to a commodity, means the sale, distribution or delivery of such commodity through retail sale agencies or other instrumentalities for consumption by an individual or a group of individuals or any other consumer.
3.3 In the instant case, the sale was made by the assessee directly to M/s APSHCL and there are no intermediaries involved in the sale and hence the subject sale cannot be treated as a retail sale .
3.4 In view of the above, the subject sale rightly falls under the categories mentioned in the said CBECs clarification and therefore, the assessee is not required to mention the RSP and hence they will be covered under S.No.1C of the Notification No.4/2006-CE, dated 01-03-2006 as amended.
4. On behalf of department learned AR. Mr. Ajay Kumar reiterated the grounds of appeal.
5. On behalf of respondent the Ld. Counsel Mr. Muthu Venkata Ramana submitted that the issue is no longer res-integra and is said to rest in the Tribunal order in the case of CCE, Hyderabad Vs Sagar Cements 2010 (256) ELT 616 (Tri-bang) decided in favour of appellants and which decision, on appeal by department, the Honble Apex Court dismissed the Civil appeal filed by department vide order dated 11-02-2011 as reported in 2011(271) ELT A16 (S.C).
6. Heard both sides and gone through the records of the case. The operative part of the Tribunal decision in Sagar Cement case is reproduced as under.
6. We have? considered the submissions made at length by both sides and perused the records. We find that while coming to the conclusion that the OIOs are not correct, the learned Commissioner (Appeals) has recorded the following findings.
I have carefully gone through the records of this appeal and the contentions put forth by the appellants in support of their claim. The adjudicating authoritys findings recorded in the impugned order have been duly considered by me. The crux of the entire dispute revolves around the interpretation of the Notification No. 4/2007-C.E., dated 1-3-2007, which provides for a concessional rate of duty for cement sold in packaged form based on the retail sale price. In terms of the Notification, retail sale price means the maximum price at which the excisable goods in packaged form may be sold to the ultimate consumer and includes 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, and the price so printed is the sole consideration for the sale. In the instant case, as seen from the case records, the Appellants have entered into an agreement with M/s. Andhra Pradesh State Housing Corporation Ltd (APSHCL) for supply of cement packed in HDPE bags, weighing 50 Kgs where the price is an all inclusive one i.e. inclusive of cost of cement, all taxes, transportation, loading, unloading and stacking at godown point. In other words, the transaction price entered into between the buyer and seller is nothing but the maximum price at which the cement is being sold which corresponds to the retail sale price, as defined in the Notification in question. It is not in dispute that the cement is being sold in packaged form and the retail sale price is declared. Once the two essential ingredients, namely, the sale of cement in packaged form and the availability of the retail sale price are satisfied, there is no reason why the concesional rate prescribed in the Notification in terms of Sl. No. 1 and 1A should not be extended. However, the lower authority has denied the benefit of the Notification based on the proviso to the Notification, which reads as Provided also that where the retail sale price of the goods are not required to be declared under the Standards of Weights and Measures (Packaged Commodities) Rules, 1977 and thus not declared, the duty shall be determined as is in the case of goods cleared in other than packaged form". It is contended that the impugned goods are out of the purview of Standards of Weights and Measures (Packaged Commodities) (SWMP) Rules, 1977 as the supplies are made to M/s. APSHCL, being an industrial consumer and hence the appellants are not required to print the Retail Sale Price (RSP) on the bags. In my view, whether the impugned goods are within the purview of SWMP Rules, 1977 or not, is immaterial for the purposes of the Notification in question. The proviso to the Notification only caters to a situation where the RSP is not required to be declared and thus not declared. Even the Boards Circular on which the lower authority has placed reliance only provides clarification on the price to be adopted when the retail sale price is not available. If a particular commodity is out of the purview of the SWMP Rules, 1977, then it is obvious that a manufacturer cannot be compelled to declare the RSP on the product and the proviso only provides for such a situation where the RSP is not declared. The Notification certainly does not bar the declaration of the RAP on the packages. The lower authority has clearly erred in the interpretation of the Notification. Here is a case where the cement is being sold in a packaged form and the retail sale price is known and declared at the time of sale. The genuineness of the retail sale price declared by the Appellants is not being contested by the department. It is only their act of printing the price on the packages that is being questioned. In these circumstances, I hold that the Appellants cannot be denied the benefit of concessional rate of duty as provided for in the Notification.
7. It can be seen? from the above reproduced portion that it is not in dispute that the respondents indicated retail sale price on the bags. It is also seen that the requirement of not printing of the retail sale price is not applicable to the respondents, as the goods are sold to APSHCL by indicating the price at which it was contracted on each bag. It is also on record that there was no case of the Revenue that the respondents were not required to declare the retail sale price on the supplied bags. We concur with the views taken by the learned Commissioner (Appeals) that the cement bags manufactured by the respondents herein were not out of the purview of SWMP Rules, as they were required to declare the RSP on the product. This our view is fortified from the fact that the authorities under the Standards of Weights and Measures Act., i.e., the Controller, Legal Metrology, Government of Andhra Pradesh had informed all the respondents herein regarding mandatory declaration of retail sale price on the bags of cement supplied to APSHCL. Accordingly, in view of the above reasoning and findings, we hold that the impugned orders are correct, legal and do not suffer from any infirmity. The appeals filed by the revenue are devoid of merits and are rejected.
7. In view of the above, we do not find any reason to interfere with the impugned order. The appeal filed by department is dismissed.
(Operative part of this order was pronounced in court on conclusion of the hearing) (MADHU MOHAN DAMODHAR) MEMBER(TECHNICAL) ( SULEKHA BEEVI, C.S.) MEMBER(JUDICIAL) ..dks 7