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2005 (2) TMI 736 - AT - Central Excise
Issues:
Assessment under Section 4A of Central Excise Act vs. Section 4 of Central Excise Act for goods cleared in pouches; Applicability of Standards of Weights and Measures Act; Pre-deposit waiver application for duty and penalty. Analysis: The appellant, engaged in manufacturing Branded Khaini, contested the revenue's demand under Section 4A of the Central Excise Act, arguing that the goods should be assessed under Section 4 of the Act. They claimed that the products were not for retail customers but were cleared in small pouches packed into polythene packets for wholesale distribution. The appellant relied on the Standards of Weights and Measures (Packaged Commodities) Rules, 1977, stating that wholesale packages intended for intermediaries are exempted under Section 34 of the Standards of Weights and Measures Act. The Revenue, citing precedents like Jayanti Food Processing Pvt. Ltd. v. CCE and Varnica Herbs v. C.B.E. & C., contended that goods like ice-cream packages and small pouches were assessable under Section 4A of the Act, even if sold to intermediaries. The courts held that even if the net weight was less than 10 gms, if the article could be sold individually or in a group, the provisions of Rule 34(b) of the Weight & Measure Act did not apply, making the goods liable for assessment under Section 4A. The Tribunal, considering the previous decisions, found that the appellant's case did not warrant a total waiver of duty. No financial hardship was demonstrated, leading to a directive for the appellant to deposit a specified amount within a set period. Upon compliance with the deposit, the remaining duty and penalty pre-deposit were waived for the appeal hearing, with a reporting compliance date set. This judgment highlights the importance of proper assessment under the Central Excise Act based on the nature of goods and their intended distribution channels, emphasizing the applicability of relevant standards and precedents in determining the tax liability.
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