TMI Blog2011 (5) TMI 725X X X X Extracts X X X X X X X X Extracts X X X X ..... holding that the duty against the appellant is liable to be determined under Section 4 of the Central Excise Act, 1944. Therefore, confirming the duty demand of Rs.5,27,77,454/- plus Rs.8,94,799/- on account of education cess along with interest and equivalent amount of penalty. 2. The brief facts of the case are that the appellants are the manufacture of paints, varnish and thinners and registered with the Central Excise department discharging their duty liability as per the provisions of Central Excise Rules. During the course of scrutiny of records of the appellants it was found that they had manufactured and cleared the base paints to their various depots for being sold to their dealers in packaged form. The value of the base paints, so manufactured and cleared, had been determined by them under Section 4A of the Central Excise Act, 1944 and in terms of the Notification No.13/2002-CE(NT) dated 01/03/2002 upto 28/02/2006 and under the Notification No.2/2006-CE(NT) dated 01/03/2006 thereafter. It was noticed that at the dealers premises, these base paints were mixed with various shades derived from the colour bank dispensing machine. The bought out colourants were mi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the said order, the appellants are in appeal before us. 5. Heard both sides. 6. Shri Bharat Raichandani, Ld. Advocate for the appellants appeared before us and submitted that the appellants are having their another unit in Pondicherry and on the identical issue a show-cause notice dated 27/03/2007 was served on the appellants, which was adjudicated by the Commissioner resulting in confirmation of demand as per the show-cause notice, which was appealed against by the appellants before this Tribunal and the Chennai Bench of this Tribunal has set aside the adjudication order (confirming the demands as per the show-cause notice) vide order No.447/448/2009 dated 15/04/2009, which was appealed against by the department and before the Hon'ble apex Court and the Hon'ble apex Court vide order dated 11/01/2010 has dismissed the appeal filed by the department in the facts and circumstances of the case. As the issue is identical which has attained finality by the decision of Chennai Bench of the Tribunal as well as by the Hon'ble apex Court. Therefore, the adjudication order be set aside and appeal to be allowed with consequential relief. 7. Shri K.M. Mondal, Ld. Consultant fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aint is not a pre-packed commodity under the SW M Act because the package of the base paint is opened at the retail shop for addition of colourants before sale to the ultimate consumer. Therefore, there is neither sale of base paint in pre-packed condition to ultimate consumer nor does the retail sale price conform to the definition given in Explanation 1 to Section 4A of the Act. He further submitted that order dated 24/07/2002 has issued on the basis that for technical reasons, it is not possible for the appellants to pre-packed paint for delivery to the ultimate consumer upon mixing of colourants through the computerized automatic dispensing machines for paint in standard quantities as specified in Schedule III to the SWM Rules 1997. Therefore, the appellants were allowed to pre-pack base material of paints for making paints to be delivered through the said computerized machine, after specifying the certain condition. It does not mean that the appellants goods are covered by the Standard of Weights and Measures (Packaged Commodities) Rules 1977. Therefore, finally he prayed that the facts of this case are distinguishable from the facts of the case decided by the Chenna ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heir dealers. In the dealers, premises, on identification of a particular shade by the ultimate consumer, the 'base' in pre-packed form is opened, colorants are added to the base to the quantity required by the computer and the same is tinted. After tinting, the shade of consumer's choice is obtained. Thus lid or cap of the package containing base is opened and perceptible modification is made of the content of the package before delivering the same to the consumer. 4. In terms of Rule 1(3) of the Standards of Weights and Measures (Packages Commodities) Rules, 1977 (hereinafter referred to as PC Rules) the Rule is applicable only to commodities in packaged form. In terms of Rule 2(1) of the above said Rules, '(1) Pre-packed commodity with its grammatical variations and cognate expressions means a commodity or article or articles which, without the purchaser being present, is placed in a package of whatever nature, so hat the quantity of the product contained therein has a pre-determined value and such value cannot be altered without the package or its lid or cap, as the case may be, being opened or undergoing a perceptible modification and the expression 'package;, wherever it o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orrectly by assessing the goods under Section 4A instead of Section 4. Hence, the differential duty is recoverable in terms of Sec.11A(1) of Central Excise Act, 1944 along with interest under Sec. 11AB ibid. Besides Berger are also liable for penal action under Section 11AC of the Central Excise Act, 1944. 10. Now, therefore, M/s Berger Paints (India) Limited, Pondicherry are hereby called upon to show cause to the Commissioner of Central Excise, Goubert Avenue, Pondicherry-605 001, within 30 days from the date of receipt of this notice as to why: i. the base cleared by them and assessed under Section 4A should not be assessed under Section 4 of the Central Excise Act, 1944. ii. Differential duty of Rs.9,48,29,097/- and differential Education Cess of Rs.8,39,937/-) (as per Annexure to this notice) should not be demanded from them in respect of clearances made during April 2002 and March 2006, under Sec. 11A of the Central Excise Act, 1944. iii. Appropriate interest on the said duty amount should not be demanded from them Sec. 4A of the Central Excise Act, 1944. iv. Penalty should not be imposed on them under Section 11AC of the Central Excise Act, 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice is obtained. Thus lid or cap of the package containing base is opened and perceptible modification is made of the content of the package before delivery the same to the consumer. 4. In terms of Rule 1(3) of the Standards of Weights and Measures (Packages Commodities) Rules, 1977 (hereinafter referred to as PC Rules) the Rule is applicable only to commodities in packaged form. In terms of Rule 2(i) of the above said Rules, "(1) Pre-packed commodity with its grammatic variation and cognate expression means a commodity or article or articles which, without the purchaser being present is placed in a package of whatever nature, so hat the quantity of the product contained therein has a pre-determined value and such value cannot be altered without the package or its lid or cap, as the case may be, being opened or undergoing a perceptible modification and the expression package, wherever it occurs, shall be construed as a package containing a pre-packed commodity." 5. From the above, it appears that the provisions of the PC Rules, 1977 are applicable only pre-packed commodity which has pre-determined value cannot be altered without the package or lid or cap being opened or under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mer, has been suppressed from the Department. Hence, the differential duty is recovering in terms of proviso to Section11A of Central Excise Act, 1944 along with interest under Section 11AB ibid. Besides Berger are also liable for penal action under Section 11AC of the Central Excise Act, 1944. 10. Now, therefore, M/s Berger Paints (India) Limited, Kundalm are hereby called upon to show cause to the Commissioner of Customs, Central Excise Service Tax, Goa, having his office at, ICE House, EDC Complex, Patto Plaze, Panaji, within 30 days from the date of receipt of this notice as to why: (i) the 'base' cleared by them and assessed under Section 4A should not be assessed under Section 4 of the Central Excise Act, 1944. (ii) Differential duty of Rs.5,27,77,454/- (Five Crores Twenty Seven Lakhs Seventy Seven Thousand Four Hundred Fifty Four Only) and differential Education Cess of Rs.8,94,799/- (Eight Lakhs Ninety Four Thousand Seven Hundred Ninety Nine Only) as per Annexure to this notice, totally amounting to Rs.5,36,72,253/- (Five Crores Thirty Six Lakhs Seventy Two Thousand Two Hundred Fifty Three Only) should not be demanded and recovered from them in respect of ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
