Customs, Excise and Gold Tribunal - Delhi
Eid Parry (India) Ltd. vs Cce on 27 April, 2006
Equivalent citations: 2006(109)ECC643, 2006ECR643(TRI.-DELHI), 2006(201)ELT305(TRI-DEL)
ORDER
R.K. Abichandani, J. (President)
1. The appellant challenges the order made by the Commissioner (Appeals) upholding the order in original by which the provisional assessment for the period from 1.3.2002 to 22.2.2003 was finalised and the assessee was directed to pay the differential duty amount which according to the learned Senior Counsel for the appellants, comes to Rs. 1,00,35,929/-. The dispute centres around the question whether "sanitaryware" notified by the Central Government under Section 4-A(1) of the Central Excise Act, 1944 would make sanitary items covered under grass/haystack, etc. liable to payment of excise duty under Section 4-A on the basis that such pre-packed items were intended to reach the consumer in that condition.
2. There is no dispute over the fact that the sanitarware items manufactured by the applicant were wrapped in grass/haystack. According to the applicant, they were so wrapped to ensure that there was no breakage during transport, while according to the Revenue, they were required to be treated as items intended to be sold in pre-packed condition.
3. The Commissioner (Appeals) found that the goods manufactured by the applicants attracted the provisions of the standards of Weights and Measures (Packed Commodities) Rules, 1977. The authorities below also relied upon the information given on 17.6.2003 by the Director of Legal Metrology, New Delhi to the effect that these items wrapped in grass/haystack, were covered by the packed commodities Rules. The appellate Commissioner observed that the competence of the said Director for issuing such certificate was not challenged and that he did not find any reason to apply other tests for coverage of the products under the Rules.
4. Prima facie, it would appear, having regard to the meaning of the words "packed" and "package" that, a package may be of any material, which could be used for making a package. Moreover, a package need not be in a particular form. The shape that a package will take would depend upon the items/things which are wrapped in it. Therefore, there can be items which are wrapped in grass/haystack so as to be described as packed items. The learned Senior Advocate made it clear that he was not raising the contention that the goods cannot be packed in wrapping of grass/haypack. He however, argued that the product manufactured by the applicant was not sold to the ultimate consumer in a packed form. It was submitted that such was the factual assertion made by the applicant which is reproduced in the show cause notice and at no point of time, it has been controverted. He further submitted that on a proper reading of Section 4A of the Act read with Rule 2(r) of the said Packed Commodities Rules, in order to create a liability under Section 4-A, it was necessary that the commodity may be sold to the ultimate consumer in a packed form. He submitted that Section 4-A(1) obligates to declare on the packages of the specified goods, their retail sale price only when the excisable goods may be sold to the ultimate consumer in packaged form.
5. Whether the excisable goods are to be sold to the ultimate consumer in a packaged form would ordinarily be a question of fact. Mere making of packages of goods would be on no consequence unless such goods are notified under Section 4A(1) of the Act. Once the goods are specified under Section 4A(1) of the Act, obligation to declare retail price on the packages arises, which is irrespective of the type of material used for packing or the manner of the packing. The liability to declare the retail price would arise for the excisability where the goods in such packaged form are sold to the ultimate consumer. In the present case, prima facie, it appears that the Commissioner (Appeals) concentrated more on the type of packages rather than on the fact whether the commoditity was to be sold to the ultimate consumer in packaged form. The issue being debatable, the applicant has made out a case for partial waiver of the pre-deposit. It is stated by the learned senior advocate that bank guarantee amount of Rs. 18,75,000/- already encashed, may be treated as a pre-deposit for the purpose of hearing the appeal.
6. Having regard to the facts and circumstances of the case, we direct that there shall be interim stay of the impugned order on the condition that the amount of Rs. 18,75,000/- which is with the department by virtue of their having encashed the bank guarantee, will be treated as a pre-deposit for the purpose of hearing this appeal. Pre-deposit of the rest of the duty amount is waived during the pendency of the appeal. This application stands disposed of accordingly. The appeal will come up for final hearing in its due course.
(Order dictated and pronounced in the open Court).