2017 (3) TMI 416 - AT - Central Excise

Claim of exemption on Footwear - benefit of N/N. 5/2006-CE - MRP not embossed on footwear - Section 4A of the Act - appellant contends that they are not required to emboss any M.R.P. on the Footwear as their products are sold to the Government department - benefit of notification also rejected on the basis of the statement of the Manager-Kamal Kumar who stated that they are not registered with the Central Excise Department. Held that - the said observation and or statement of the Manager Mr. Kamal Kumar given at the time of search on the spot in the factory is only a general statement and does not relate to the period in question particularly. On such vague statement no conclusive averment can be said to be made so as to deny the exemption of N/N. 5/2006- CE - Further it is admitted fact that the appellant has manufactured and cleared their product only to the Government Organization like-NCC & CISF etc. at the rate contract which is less than Rs. 250/- per pair and reliance was placed in the case of Shri Suresh Kumar and others Versus Commissioner of Central Excise Kanpur 2015 (6) TMI 733 - CESTAT NEW DELHI where it was held that the provisions of Standards of Weights and Measures Act and the Rules made thereunder have no relevance for complying with the conditions of this exemption notification - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Interpretation of Notification No. 5/2006-CE and SSI Exemption under Notification No. 8/2003-CE.
2. Applicability of Standards of Weights & Measures Act on MRP printing for exemption eligibility.

Analysis:
1. The case involved an appeal against an Order-in-Appeal passed by the Commissioner (Appeals), Customs & Central Excise, Kanpur. The appellant, a manufacturer of Ankle DMS Boots and NCC shoes, was alleged to have not paid Excise duty on clearances of shoes with a sale value below Rs. 250 per pair, despite exceeding the exemption limit in certain financial years. The Revenue contended that the appellant supplied shoes to government institutions under rate contracts without marking MRP, thus challenging their eligibility for exemptions under relevant notifications.

2. The Revenue argued that the appellant's failure to declare clearances below Rs. 250 to the Government Department, absence of MRP marking on supplied footwear, and exceeding the SSI Exemption limit warranted duty payment. The Order-in-Original confirmed the demand for a specific financial year invoking the extended period under relevant rules. The Commissioner (Appeals) rejected the appeals, emphasizing that MRP marking exemption conditions were not met, and the appellant was not entitled to benefits under Notification No. 5/2006-CE.

3. The Tribunal, in a similar batch of appeals, held that supplying shoes to defense organizations at rates below Rs. 250 per pair did not require MRP printing for exemption eligibility. The Tribunal emphasized that compliance with MRP conditions under exemption notifications was crucial, irrespective of Standards of Weights & Measures Act provisions. Noting the lack of evidence of non-compliance, the Tribunal set aside the denial of exemption benefits, allowing the appeals.

4. Upon review, the Tribunal found the manager's statement regarding MRP embossing as a general statement not specific to the relevant period. Given the appellant's supply only to government organizations at rates below Rs. 250 per pair, aligning with previous Tribunal decisions, the appeals were allowed, and the impugned order was set aside. The appellant was deemed entitled to consequential benefits as per the law.

In conclusion, the Tribunal's decision focused on the interpretation of exemption notifications concerning MRP marking requirements for footwear supplied to government institutions at rates below Rs. 250 per pair. The case underscored the significance of compliance with specific conditions for exemption eligibility, ultimately leading to the allowance of the appeals and setting aside of the Commissioner (Appeals) order.