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2022 (10) TMI 802 - AT - Central ExciseBenefit of Concessional rate of duty - Cement cleared in packed form i.e in Bags of 50 kgs. to customers - clearance to M/s GSCSCL, educational institutions, builders & developers, organization and for self consumption - Retail sale or not - benefit of Notification No. 4/2006-C.E., dated 1-3-2006 - Corresponding penalty of equal amount imposed under Rule 25 - HELD THAT:- It is seen in the present that the assessee had sold cement in packs of 50 kgs. to customers/ buyers. From a combined reading of the above reproduced provisions of Rule 2A of the Rules, these genre of buyers would fall under the category of Institutional Consumer or Industrial Consumer. On this score itself, it is found that the provisions applicable to packages intended for retail sale in Chapter II of the said rules, will not apply to the clearances of cement by the appellant to its Industrial or Institutional consumers. In respect of the clearances it will necessarily have to be held as packages not intended for retail sale and to which the provisions of Chapter II of the Rules shall not apply. In view of Rule 2A thereof, duty demands in respect of these clearances will therefore not sustain - the issue is no longer res integra. It has been held in the various cases that cement cleared in packaged form (50 kg. bags) to charitable organizations, builders/developers/ready mix concrete (RMC) manufacturers, contractors and construction firms, infrastructural development projects, educational institutions, societies and hospitals, government bodies, captive consumption, manufacturers of finished goods will qualify as sale to industrial/institutional customers - reliance can be placed in CHETTINAD CEMENT CORPN. LTD. VERSUS CCE [2008 (12) TMI 684 - CESTAT CHENNAI]. The argument of the revenue that these types of clearances fall foul of the Notification No. 4/2006-C.E. cannot be accepted - These clearances cannot be considered as retail sales and hence benefit of the said notification cannot be denied to them. Confirmation of demand of Rs. 3,11,188/- - HELD THAT:- The said demand was confirmed in respect of the clearance of the Cement in 50 Kgs bags to individual consumers. The submission of the appellant is that since the said clearance is made directly by the appellant to the individual consumers, there is no intermediary involved such as distributor/dealer etc. and the goods were not sold through a Retail Sale Shop Agency or any other instrumentality, therefore, such clearances is not covered under retail sale, accordingly, there is no need of a fixing retail sale price on the packages in terms of the legal metrology (Packaged Commodities) Rules, 2011 - Appellant would not be eligible for exemption Notification No. 4/2006-C.E. Accordingly, the demand of Rs. 3,11,188/- is upheld. Corresponding penalty of equal amount of Rs. 3,11,188/- imposed under Rule 25 - HELD THAT:- This is not a case of clandestine removal or even the malafied intention cannot be attributed to the appellant. As the appeal have cleared the goods on payment of concessional rate of duty by availing notification, the appellant had a bonafide belief that they are eligible for Notification No. 4/2006-C.E. Needless to say that the interpretation of Notification No. 4/2006-C.E has travelled through various forum and finally the issue was settled by the Hon’ble Supreme Court in number of judgments, therefore, in the nature of this case it cannot be said that the appellant had any malafide intention in short payment of excise duty. Moreover, the appellant paid the duty of Rs. 3,11,188/- along with interest thereon of Rs. 30,218/-. For this reason also the penalty under Rule 25 of Central Excise Rules, 2002 is not impossible, accordingly, the penalty is set aside. Appeal allowed in part.
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