TMI Blog2010 (9) TMI 257X X X X Extracts X X X X X X X X Extracts X X X X ..... Sudha Koka, SDR, for the Respondent. [Order per : P. Karthikeyan, Member (T)]. - This Larger Bench is constituted to decide the questions referred by the Bangalore Bench of the Tribunal in Roys Industries Ltd. v. CCE (Appeals-II), Hyderabad reported as [2006 (201) E.L.T. 609 (Tri.-Bang.)]. 2. Facts of the case in brief are as follows. The appellants M/s. Roys Industries, Medchal, manufacture Caram Eclairs and Choco Eclairs for M/s. ITC Limited. Each piece of the above weighs approximately 5.5 gms. and is classifiable under CSH 1804.00 of the Central Excise Tariff. These goods are notified both under Section 4A of the Central Excise Act, 1944 (the Act) and the Standards of Weights and Measures Act, 1976 (SWM Act). The appellants were of the view that there was no requirement of affixing MRP following Rule 34(b) of the Standards of Weights Measures (Packaged Commodities) Rules, 1977 [PC Rules for short] as the unit weight of the goods was below 10 gms. Moreover, they claimed that their product was packed in 'wholesale package' and was meant for wholesale dealers as per Rule 29 of the PC Rules. They were not required to affix the MRP on the said packages in view of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... idered as a 'wholesale package' as contended by the appellants and agreed by the Mumbai Bench or whether they should be considered as 'multi-piece package' as per the views of this Bench? (ii) Whether the exemption under Rule 34(b) of Standards of Weights Measures (Packaged Commodities) Rules, 1977 available for individual pieces is relevant for deciding if the assessment has to be done under Section 4 or 4A of the Central Excise Act? (iii) Whether the assessment of the impugned products should be done under Section 4 or Section 4A of the Central Excise Act? 4. The appellants have advanced arguments citing the relevant definitions as follows. Rule 2(x). "Wholesale package" means a package containing : (i) A number of retail packages, where such first mentioned package is intended for sale, distribution or delivery to an intermediary and is not intended for sale direct to a single consumer; or (ii) A commodity sold to an intermediary in bulk to enable such intermediary to sell, distribute or deliver such commodity to the consumer in smaller quantities, or (iii) Packages containing ten or more than ten retail packages provided that the ret ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the marketing pattern, he would follow, is important. As held in this decision, the state of mind of the manufacturer can be determined from the facts of the case. ITC Ltd. v. Commissioner of Central Excise, New Delhi - 2004 (171) E.L.T. 433 (S.C.) - In this case it was held that the appellant cannot be charged for the violations by its million retailers of SWM Act . PC Rules after it had cleared cigarettes affixing MRP as prescribed in the relevant notification. 5.2 PC Rules use the expression "intended for retail sale" under various provisions in order to define cases in which the particular set of information is required to be given on the package. Whether a packaged commodity is intended for retail sale or not will depend on the manufacturer and the marketing pattern adopted by him. Rule 3 of the said Rules, clearly states that the provisions of that Chapter shall apply to packages intended for retail sale and the expression 'package' wherever it occurred in that chapter shall be construed accordingly. 5.3 In the instant case, the appellant (manufacturer) is clear in his mind that the impugned goods are required to be sold only in wholesale and not me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the amount of abatement." 6.1 In the light of the above decision of the Apex Court, to qualify for assessment under Sec. 4A, the packaged excisable goods, (i) are required to mention the retail sale price thereof under the SWM Act, or the PC Rules [packages covered under Chapter II of (PC) Rules]. (ii) should not be covered under Rule 29 of PC Rules. (iii) should not enjoy exemption under Rule 34 of the PC Rules. 6.2 In the case at hand, the impugned goods are cleared in wholesale packages and the declarations as stipulated under Rule 29 of the PC Rules have been affixed on such packages. Therefore there was no requirement to affix MRP on the impugned goods as they were not intended for retail sale. 7. The CBEC in the circulars issued from time to time had clarified that even if a commodity is notified under Section 4A , if there is no statutory requirement under the law for declaring the MRP on the packages cleared by the manufacturer, then the assessments have to be done under Sec. 4 and not Sec. 4A. Even otherwise, the PC Rules are not applicable to the impugned goods cleared in packages vide Rule 34(b) ibid as the impugned product is less than 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the PC Rules. The individual pieces, namely chocolates, are neither retail packages as per definition under Rule 2(p) of the PC Rules nor do they contain the declarations under Rule 6 of the said Rules. Accordingly the pet jars and poly bags containing number of individual chocolate pieces cannot be considered as wholesale pack. These packs are nothing but retail packs since these pet jars and poly bags are also available in retail. The relevant definition of retail sale and Rule 6 were cited. Rule 6 of PC Rules referred to stipulates as follows : Every package shall bear on it or on a label fixed thereto a definite, plain and conspicuous declaration as per the provisions of Chapter II of PC Rules furnishing name and address of the manufacturer/packer/importer, generic name of commodity, quantity (standard unit of weight or measure or number), month and year of the manufacture' packing, etc. 8.1 The pet jars and poly bags contained all the details required under Rule 6 of the said Rules and the same are intended for sale in retail and thus qualifies as retail pack as per Rule 2(p) of the PC Rules. In the instant case, the pet jars and poly bags contained the details und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... India [2004 (164) E.L.T. A177 (S.C.)], only the operative part of the Tribunal stood merged with the Supreme Court judgment and not the reasoning adopted by the Tribunal. 9.2 Further it is submitted that the Dept's appeal on the issue in the case of M/s. Swan Sweets (P) Ltd., M/s. Cadbury India Ltd., M/s. Makson Confectionery (P) Ltd. and Others is pending decision by the Supreme Court. It is submitted that the impugned product is required to be assessed under the provisions of Section 4A of the Act. 10. We have heard both sides. 11. The referral order framed the following questions :- (i) Whether the pet jars/poly bags containing individual pieces of Eclairs weighing less than 5.5 gms each should be considered as a 'wholesale package' as contended by the appellants and agreed by the Mumbai Bench or whether they should be considered as 'multi-piece package' as per the views of this Bench? (ii) Whether the exemption under Rule 34(b) of Standards of Weights Measures (Packaged Commodities) Rules, 1977 available for individual pieces is relevant for deciding if the assessment has to be done under Section 4 or 4A of the Central Excise Act? (iii) Whet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed when the net weight or measure of the commodity was 20 gms. or 20 mililitres or less, if sold by weight or measure. When the poly bag or pet jar was sold in retail, the factual position was that its weight was more than 20 gms. Therefore, the exemption would not be applicable to the poly bag or the pet jar. Hence, there was a requirement of printing the MRP on the pet jar or poly bag. 11.3 The form in which the goods were cleared by the manufacturer was not a relevant factor for deciding whether the impugned goods should be assessed under Section 4 or 4A. The Tribunal relied on the observation contained in BPL Telecom (P) Ltd. v. CC, Cochin [2004 (168) E.L.T. 251 (Tri.-Bangalore)] that "the definition makes it clear that 'retail sale' includes "distribution or delivery of such commodity through retail sales agencies or other instrumentalities for consumption by an individual.". The pet jars/poly bags were apparently retail packages attracting assessment under Section 4A. 12. We have perused the case records and considered the rival submissions. In the Swan Sweets (P) Ltd. case, the Tribunal held that the pet jars/plastic bags containing individual pieces of choco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... jars/poly bags containing more than 10 individual pieces are held as wholesale packages. The individual pieces each weighing less than 10 gms are excluded from MRP based assessment in terms of Rule 34(a) of the PC Rules. The questions referred are answered accordingly. The regular Bench may decide the appeal in the light of our above observations. (Pronounced in open court on .) Sd/- (P. Karthikeyan) Member (Technical) 14. [Order per : D.N. Panda, Member (J)]. - I have gone through the order recorded by my learned brother Sri Karthikeyan in the present reference. A Larger Bench has neither appellate jurisdiction nor revisionary powers to settle facts of a case referred to it or decide result of an appeal. It merely exercises advisory jurisdiction derived by it by virtue of reference made to it by the Hon'ble President of the Tribunal. It has no jurisdiction to reverse decision arrived at in an appeal except laying down the law for application thereof by the referring bench to arrive at its own decision which is essence of fair and objective administration of law with abundant caution that the decision of the Judge or Tribunal must be absolutely unfettered by a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... titutes retail sale. (C) In Para 5.2 of the referral order the Division Bench found that Poly Bag or Pet Jar is sold in retail and the factual position was that weight of the commodity in Poly Bag/Pet Jar was more than twenty grams. Therefore the exemption would not be applicable to the Poly Bag or Pet Jar. Hence, there was a requirement of printing the MRP on the Pet Jar or Poly Bag. On such premises, the assessment has to be necessarily done u/s 4A of the Act as held by the lower authorities. (D) It was also the finding of the Division Bench in Para 5.2 of the order that the appellants have confused the issue saying that the Cartons containing Pet Jars are not meant for ultimate consumers and hence, there is no requirement for printing the MRP. This amounts to obfuscation of the issue. No manufacturer clears the goods directly to the ultimate consumers. The form in which the goods are cleared by the manufacturer is not a relevant factor for deciding whether the impugned goods should be assessed u/s 4 or 4A of the Act. Such view of the Bench was supported by the findings of the CESTAT in para 6 of the decision in the case of BPL Telecom (P) Ltd. v. CCE, Cochin - 2004 (16 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 95;Rule 2A appearing under Chapter II of the Rules has made provision in respect of packages intended for retail sale. Rule 12 appearing under this chapter prescribes the manner in which declaration of quantity shall be made. According to sub-rule (1) of the said rule, the declaration of quantity shall be made in terms of such unit of weight, measure or number as would give accurate and adequate information to the consumer with regard to the quantity of the commodity contained in the package. 20. The Fifth Schedule appended to Rule 12(2) contains a list of commodities in packaged form which may be sold by "weight", "measure" or "number" as mentioned in that schedule against the corresponding commodity. The impugned commodity does not appear in Fifth Schedule. 21. Chapter V of the Rules has made express provision by Rule 34 to exempt any package containing a commodity from applicability of the Rules through its clause (b) if "the net weight of the commodity at the relevant point of time was twenty grams or twenty millilitres or less or less if sold by weight or measure. 22. Whether a particular package is a retail package or a wholesale package is a question ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d consequently, MRP based valuation under Section 4A would apply. 26.In view of the foregoing, the questions referred to the Larger Bench are answered as under : (i) The finding of fact by the referral Division Bench that the impugned poly packs and pet jars are multi-piece retail packages, based on facts of this case and evidence available in this case, is sound. (ii) The exemption under Rule 34(b) of the rules will be available in respect of a multi-piece retail package if the total weight of all the pieces in the multi-piece package does not exceed the prescribed limit as held by Krafttech Products (supra) and Urison (supra). (iii) view of the finding of fact by the referral Bench in this case that the impugned poly packs and pet jars are multi-piece retail packages and the total weight of the pieces in such packages exceed 20 gms, the exemption under Rule 34 (b) is not applicable and consequently, the assessment is required to be done applying provisions of Section 4A. 27.The Registry is directed to return the appeals to the referring Division Bench for passing the final order. Sd/- (D.N. Panda) Judicial Member 28. [Order per : Chittaranjan Satapath ..... X X X X Extracts X X X X X X X X Extracts X X X X
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