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2014 (9) TMI 661 - CESTAT NEW DELHI (LB)Waiver of pre deposit - Valuation - MRP value or Transaction value - whether the tem-adhesive cleared by the applicant packages containing 5 to 25 Itrs. is required to be chargeable to duty as per Section 4A of the said Act - Held that:- classification is not disputed as the goods have been classified under Central Excise Tariff heading No. 3506 91 90. The said Chapter is notified to affix MRP. Therefore, it is to be seen that whether the applicant is entitled for exemption as per Rule 2A of the Weights & Measures (PC) Rules, 1977 or not. In this case learned Technical Member has relied upon the statement of Shri O.P. Agarwal, Vice-President, Plant dated 28-8-2011 wherein there is an admission on this point that basic and only use of the product tem adhesive is for retreading of tyre. The noticee in their statement submitted that tem adhesives are capable of being used in house but no evidence has been placed on record. Therefore, looking into the nature of the product, it is clear that tem adhesive is consumed by Industrial consumers and provisions of Section 4A are not applicable in unit containers as per Rule 2A(ii) Explanation. Plain reading of the explanation to Rule 2A of the said rules clearly shows that if goods are sold to institutional/industrial consumers directly by the manufacturer, the said rule will not apply. In Para 70 of the impugned order, the learned Commissioner has recorded the findings that since noticee’s product tem adhesive is not directly sold to the retailer, but these are sold through dealers and distributors that too some distributors have their own tyre retreading nature. When these facts were on record, it is proved that the applicant has not sold these goods directly to the industrial/institutional consumers, therefore, the applicant cannot avail exemption from affixing MRP on their finished product. To all other institutional or industrial consumers of prepared commodity sold as retail package that chapter would apply. Explanation of industrial or institutional consumer in Rule 2A must also be read only to the provisions to Rule 2(p) for the purpose of Chapter 2. Therefore, the only purchaser of packaged commodities who are institutional or industrial consumer and buy the goods directly from the manufacturers are not required to affix MRP. Admittedly, in this case industrial consumers have not bought the goods from the applicant directly - Therefore, the applicant is not entitled for exemption under Rule 2A of the Standards of Weights & Measures (P.C.) Rules, 1977. In these facts, prima facie, I am of the view that the applicant is required to pay duty as per Section 4A of the Central Excise Act, 1944. - Pre-deposit of duty and penalty shall stand waived and its recovery stayed during the pendency of the appeal - Decided in favour of assessee.
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