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2016 (12) TMI 160 - AT - Central ExciseLiability of tax - Tem Adhesive C - 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 - whether the liability of appellant to discharge duty for the said goods is under the provisions of Section 4 or Section 4A? - Held 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. 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. 2014 (6) TMI 453 - CESTAT MUMBAI held that in the absence of such endorsement, it cannot be said that the goods are cleared for institutional/industrial consumers. Appeal allowed - decided in favor of appellant-assessee.
Issues:
Liability of appellant to discharge duty under Section 4 or Section 4A. Analysis: The appeal was against the order of the Commissioner of Central Excise, Indore, regarding the liability of the appellant, engaged in the manufacture of Tem Adhesive 'C', to discharge duty under Section 4 or Section 4A. The appellant claimed coverage under Section 4A, citing the products being notified under the Standard of Weights and Measures (Packaged Commodities) Rules, 1977. However, the Revenue contended that duty should be discharged under Section 4, as the product was deemed for industrial/institutional buyers. This led to proceedings resulting in a demand for differential duty and penalty. The appellant argued that they never directly sold the goods to industrial/institutional consumers but through dealers, hence Rule 2 A of the P.C. Rules, 1977 should not apply, supporting their valuation under Section 4A. On the contrary, the Revenue asserted that the nature of the product necessitated use by industrial or institutional consumers only, thus not falling under the definition of "retail package" under Rule 2 (p) of P.C. Rules. After hearing both parties and examining the records, it was found that the appellant's assertion of not selling directly to consumers, especially industrial/institutional ones, was unchallenged. As all sales were through dealers, the exclusion under Rule 2 A of P.C. Rules did not apply. Additionally, the absence of an endorsement on packages indicating goods not meant for resale, as per precedents like H&R Johnson India Pvt. Ltd., led to the conclusion that the goods were not cleared for institutional/industrial consumers. The Tribunal's decisions in various cases supported this interpretation. Consequently, the Tribunal ruled that the impugned order was unsustainable and set it aside, allowing the appeal.
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