TMI Blog2010 (3) TMI 18X X X X Extracts X X X X X X X X Extracts X X X X ..... uring the course of arguments, the learned senior counsel for the appellant produced before us the cartons of 'Cookies' and showed us that they have printed the Maximum Retail Price on the packets and therefore, they are entitled to claim the benefits of Section 4-A of the Act. - The Department is right in contending that the appellant is not at all entitled to claim any benefit under Section 4-A of the Central Excise Act, since his goods are chargeable under Section 4 of the Central Excise Act. – decided in favor of revenue - 1386 of 2008 and 1 of 2008 - - - Dated:- 5-3-2010 - CORAM: The Honourable Mr.Justice Elipe Dharmarao And The Honourable Mr.Justice N.Paul Vasanthakumar Writ Appeal preferred under Clause 15 of the Letters Patent as against the order of the learned single Judge dated 23.9.2008 made in W.P.No.11028 of 2007. For appellant: Mr.Aravind P.Duttar, Senior Counsel for Mr.V.S.Jayakumar For R.1: Mr.K.Ravichandra Babu, S.C.G.S.C. JUDGMENT ELIPE DHARMARAO, J. The appellant is having its factory premises at Plot Nos.22 and 23, Ambattur Industrial Estate, Chennai-58 and registered as manufacture of 'Cookies', falling under Chapter and sub-headin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed proper documents like delivery challan for movement of these goods; that the assessee also did not inform the Department nor did he obtain necessary permission for storage of non-duty paid excisable goods outside the factory premises (godown/cold storage); that the dough, whenever necessary, is brought back to the factory for baking or sent to the own outlets of the assessee or sold to their franchisees for use in the manufacture of cookies; that the assessee has cleared the dough to their franchisee/outlets under invoices without payment of duty and this fact of clearance of dough, without payment of duty, has not been reflected in their ER-1 returns filed and thus the assessee suppressed the fact of clearance of dough to their outlets/franchisee. 4. It is the further case of the Revenue that during the course of investigation, the assessee furnished a detailed worksheet showing clearance of dough from March, 2005 to December, 2005, the quantity and the value cumulated based on the invoices raised during the period; that the said figures represented the month-wise value of dough cleared to their franchisees such as M/s.Soniraj Confectionary, M/s.Mom's Delight, M/s.SSR Foods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e on sales tax for local sales and sales tax for outstation sales and after deducting excise duty and cess from 1.7.2004 onwards, the assessable value has been arrived at and in total the duty payable for the entire period from 1.2.2004 to 30.4.2006 was worked out at Rs.7,04,697/- and cess at Rs.14,094/-. 7. On the above said imputations, the assessee was issued with a show-cause notice dated 31.7.2006 requiring the assessee to show-cause, within 30 days from the date of receipt of the notice, why action should not be initiated against them and it has also been mentioned therein that '... or having shown cause if they do not appear for personal hearing when the case is posted for hearing before the adjudicating authority, the case will be decided exparte on the basis of evidences available on record.' 8. However, without giving any explanation to this show-cause notice, the assessee straight away approached the second respondent Commission. By the time the assessee approached the second respondent Commission, the assessee has paid the duties regarding the dough clearance and the important question that was left for consideration before the second respondent/Commission was ' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e manner hereinafter provided: Provided that no such application shall be made unless, - (a) the applicant has filed returns showing production, clearance and central excise duty paid in the prescribed manner; (b) a show cause notice for recovery of duty issued by the Central Excise Officer has been received by the applicant; and (c) the additional amount of duty accepted by the applicant in this application exceeds two lakh rupees: Provided further that application shall be entertained by the Settlement Commission under this sub-section in cases which are pending with the Appellate Tribunal or any Court: Provided also that no application under this sub-section shall be made for the interpretation of the classification of excisable goods under the Central Excise Tariff Act, 1985 (5 of 1986). (2) Where any excisable goods, books of account, other documents have been seized under the provisions of this Act or rules made thereunder, the assessee shall not be entitled to make an application under sub-section (1), before the expiry of one hundred and eighty days from the date of the seizure. (3) Every application made under sub-section (1) shall be accompanied by such fe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be proceeded with or reject the application: Provided that an application shall not be rejected under this sub-section, unless an opportunity has been given to the applicant of being heard: Provided further that the Commissioner of Central Excise shall furnish such report within a period of one month of the receipt of the communication from the Settlement Commission, failing which it shall be presumed that the Commissioner of Central Excise has no objection to such application; but he may raise objections at the time of hearing fixed by the Settlement Commission for admission of the application and the date of such hearing shall be communicated by the Settlement Commission to the applicant and the Commissioner of Central Excise within a period not exceeding two months from the date of receipt of such application, unless the presiding officer of the Bench extends the time, recording the reasons in writing. (2) A copy of every order under sub-section (1) shall be sent to the applicant and to the Commissioner of Central Excise having jurisdiction. (3) Subject to the provisions of sub-section (4), the applicant shall within thirty days of the receipt of a copy of the order u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his Act, pass such order as it thinks fit on the matters covered by the application and any other matter relating to the case not covered by the application, but referred to in the report of the Commissioner of Central Excise and Commissioner (Investigation) under sub-section (1) or sub-section (6). (8) Subject to the provisions of Section 32-A, the materials brought on record before the Settlement Commission shall be considered by the Members of the Bench concerned before passing any order under sub-section (7) and, in relation to the passing of such order, the provisions of Section 32-D shall apply. (9) Every order passed under sub-section (7) shall provide for the terms of settlement including any demand by way of duty, penalty or interest, the manner in which any sums due under the settlement shall be paid and all other matters to make the settlement effective and shall also provide that the settlement shall be void if it is subsequently found by the Settlement Commission that it has been obtained by fraud, or misrepresentation of facts. (10) Where any duty payable in pursuance of an order under sub-section (7) is not paid by the assessee within thirty days of the receipt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment Commission in its order dated 6.12.2006. The said order of the Settlement Commission, made available from page No.32 of the typed set, clearly shows that the same has been passed at the stage of admission since it bears the caption 'admission-cum-final order No.66/2006-C.Ex.' 18. It is the settled legal position that in any proceeding if a question of jurisdiction of the authority deciding the issue is raised, prior to dealing with other issues involved, the question of jurisdiction must be dealt with as a preliminary issue by the authorities. But, in the case on hand, the Settlement Commission, which has been established as a quasi-judicial body under the Statute, has proceeded to deal with an aspect which is completely out of its purview and jurisdiction. 19. At this juncture, we feel it apt to quote the rulings of the Honourable Supreme Court on the aspect of jurisdiction. In Arun Kumar v. Union of India [(2007) 1 SCC 732] the Honourable Apex Court has held: 74. A jurisdictional fact is a fact which must exist before a court, tribunal or an authority assumes jurisdiction over a particular matter. A jurisdictional fact is one on existence or non-existence of whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itled to claim abatement under Section 4-A of the Central Excise Act or whether his case has to be dealt with only under Section 4 of the Central Excise Act, we extract hereunder Sections 4 and 4-A of the Act: "4. Valuation of excisable goods for purposes of charging of duty of excise.(1) Where under this Act, the duty of excise is chargeable on any excisable goods with reference to their value, then, on each removal of the goods, such value shall (a) in a case where the goods are sold by the assessee, for delivery at the time and place of the removal, the assessee and the buyer of the goods are not related and the price is the sole consideration for the sale, be the transaction value; (b) in any other case, including the case where the goods are not sold, be the value determined in such manner as may be prescribed. Explanation. For the removal of doubts, it is hereby declared that the price-cum-duty of the excisable goods sold by the assessee shall be the price actually paid to him for the goods sold and the money value of the additional consideration, if any, flowing directly or indirectly from the buyer to the assessee in connection with the sale of such goods, and suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not include the amount of duty of excise, sales tax and other taxes, if any, actually paid or actually payable on such goods." Section 4-A of the Act reads as follows: "4-A. Valuation of excisable goods with reference to retail sale price.(1) The Central Government may, by notification in the Official Gazette, specify any goods, in relation to which it is required, under the provisions of the Standards of Weights and Measures Act, 1976 (60 of 1976) or the rules made thereunder or under any other law for the time being in force, to declare on the package thereof the retail sale price of such goods, to which the provisions of sub-section (2) shall apply. (2) Where the goods specified under sub-section (1) are excisable goods and are chargeable to duty of excise with reference to value, then, notwithstanding anything contained in Section 4, such value shall be deemed to be the retail sale price declared on such goods less such amount of abatement, if any, from such retail sale price as the Central Government may allow by notification in the Official Gazette. (3) The Central Government may, for the purpose of allowing any abatement under sub-section (2), take into account th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of both these provisions of law, it is clear that while Section 4-A deals with the valuation of excisable goods with reference to retail sale price of goods, in relation to which it is required under the provisions of the Standards of Weights and Measures Act, 1976 (60 of 1976) to declare on the package thereof the retail sale price of such goods, the same is not the condition insofar as Section 4 of the Act is concerned. 23. Therefore, for application of either Section 4 or Section 4-A of the Act, the factual question that requires to be decided is whether the goods are required to declare on the package the retail sale price under the Standards of Weights and Measures Act, 1976 or the Rules made thereunder. 24. As per Rule 34(a) of the Standards of Weights and Measures (Packaged Commodities) Rules, 1977, as it stood then, before it was omitted w.e.f. 13.1.2007, by G.S.R.425 (E), dated 17.7.2006, while dealing with exemption in respect of certain packages, it has been clearly stipulated that "Nothing contained in these Rules shall apply to any package containing a commodity if - (a) the marking on the package unambiguously indicates that it has been specially packed fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ackages. 27. But, during the course of arguments, the learned senior counsel for the appellant produced before us the cartons of 'Cookies' and showed us that they have printed the Maximum Retail Price on the packets and therefore, they are entitled to claim the benefits of Section 4-A of the Act. 28. But, as has already been observed supra, Section 4-A of the Act applies only to the goods, in relation to which it is required under the provisions of the Standards of Weights and Measures Act or the Rules made thereunder to declare on the package the retail sale price of such goods. But, in the case on hand, since admittedly, the products are being supplied by the assessee to their institutional customers in bulk based on specific contracts entered into with them, printing on them that they are specifically packed for such institutional customers and not meant for retail sale, and thus are exempted under Rule 34(a) of the Standards of Weights and Measures (Packaged Commodities Rules) 1977, the assessee cannot say that he is obliged under the provisions of the Standards of Weights and Measures Act to declare the retail sale price on the package a pre-condition to claim benefits ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lacking in this case and therefore, the assessee is not at all entitled to claim any benefit under this judgment of the Honourable Apex Court. 32. The learned senior counsel for the appellant would further submit that now, the Central Government has issued a Notification No.14/2008-C.E.(N.T.), dated 1.3.2008, in exercise of the powers conferred by sub-sections (1) and (2) of section 4A of the Central Excise Act, 1944, specifying the goods to which the provisions of sub-section (2) of Section 4-A shall apply and allows the abatement the percentage of retail sale price and would point out that this notification at Serial No.12 includes 'biscuits' bearing sub-heading No.1905 3100 or 19059020 allowing the abatement of 35%. Relying on the above said Notification, the learned senior counsel would press into service a judgment of the Honourable Apex Court in WHIRLPOOL OF INDIA LIMITED vs. UNION OF INDIA AND OTHERS [(2007) 14 SCC 468], wherein while answering the question as to whether refrigerator is a 'packaged commodity' or not, the Honourable Apex Court has held: "Since notification No.9 of 2000 dated 1.3.2000 included refrigerator, unless validity of the notification was challen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lity during the relevant point of time of committing the evasion of duty. (iii)The Department is right in contending that the appellant is not at all entitled to claim any benefit under Section 4-A of the Central Excise Act, since his goods are chargeable under Section 4 of the Central Excise Act. 35. The learned single Judge has correctly assessed the facts and circumstances of the case in the manner required by law and has arrived at an unerroneous conclusion of rejecting the claim of the assessee and upholding the case of the Revenue, by setting aside the illegal and erroneous order passed by the second respondent/Settlement Commission. Therefore, we see no reason to cause our interference into the said order passed by the learned single Judge. In the result, this writ appeal filed by the assessee fails and the same is dismissed. No costs. Consequently, M.P.No.1 of 2008 is also dismissed. Index: Yes Internet: Yes (E.D.R., J.) (N.P.V., J.) Rao 05.03.2010 To 1. The Commissioner of Central Excise, Chennai-II Commissionerate, 692, MHU Complex, Anna Salai, Nandanam, Chennai-600035 2. The Customs and Central Excise Settlement Commission, A ..... X X X X Extracts X X X X X X X X Extracts X X X X
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