9911796707
TMI Blog2014 (11) TMI 920X X X X Extracts X X X X X X X X Extracts X X X X ..... cordingly. The appellant procured orders from the Tamil Nadu Civil Supplies Corporation (TNCSC) for implementing the scheme of free distribution of Mixies and Table Top Wet Grinders to the beneficiaries of the families holding Rice Cards announced by the Govt of Tamil Nadu. The goods are notified under Section 4A of the Central Excise Act and the same were assessed to duty on Retail Sale Price (R.S.P) value under Section 4A of the Central Excise Act. The appellant secured order for supply of 3,00,000 nos. of domestic Electric Food Mixer at the rate of Rs. 1165/- + VAT per piece and 8,00,000 nos. of Table Top Wet Grinders @ Rs. 3045 per piece inclusive of all taxes unloading charges etc. In pursuance of orders from TNCSC, the appellants have supplied the above goods and paid Excise Duty as per Section 4A after availing abatement of 35% from the RSP in terms of Notification No.49/2008-CE (NT) dt. 24.12.2008 as amended. A show cause notice dt. 18.9.2012 was issued alleging that valuation for payment of excise duty should have been adopted under Section 4 of the Central Excise Act on the ground that the goods were supplied to "institutional consumers" and accordingly demanded different ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uestion are packaged commodity as per the above Act and Rules. The said goods are also notified under Section 4A of the Central Excise Act and appropriate Central Excise Duty has been paid on the RSP basis after availing the abatement as per notification No.49/08. There is no dispute on the fact that the goods are covered under L.M.R and assessable under Section 4A of the Central Excise Act. (iii) To implement the scheme of free distribution of the aforesaid items to the women beneficiaries belonging to families holding family cards eligible for drawing rice, M/s.TNCSC, a Govt of Tamil Nadu undertaking, is authorized to float tender and procure the goods as per the rate contract. The appellants secured the contract and supplied the goods after assessing the duty under Section 4A of the Act and the same were supplied to Govt of Tamil Nadu through TNCSC for free distribution to women beneficiaries as per the scheme. The goods are supplied to weaker and poorer sections of people of Tamil Nadu who are the ultimate beneficiaries. (iv) TNCSC is not an institutional consumer. As per Rule 3 of L.M.R "institutional consumer" means "the institutional consumer like transportation, Airways, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etrology Act 2009 (LMR, 2009), 'sale' means transfer of property in any weight, measure or other goods by one person to another for cash or for deferred payment for any other valuable consideration. In the present case, there is no sale involved as TNCSC has distributed the goods free of cost. Definition of "retail sale" referred to in Section 4A means the "maximum price at which the excisable goods in packaged form may be sold to the ultimate consumer". This explanation does not include free sale as "retail sale". 5.3 TNCSC is neither "retail dealer" nor "wholesale dealer" as per the definition of LMR. If the goods are ultimately sold to the retail consumer, the price shall be treated as "retail price". Sale to the intermediary is not a retail sale. The appellant sold the goods in bulk to TNCSC which cannot be considered as 'retail sale'. 5.4 He relied on the counter affidavit filed before the Hon'ble Madras High Court in the writ petition filed by P. Jaganathan, one of the tenderer. The decision relied by the appellant in the case of PG Electroplast Ltd. (supra) is not applicable to the facts in the present case, as in this case, in the absence of details of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... both sides and carefully gone through the records. M/s. Butterfly Gandhimati Appliances Ltd. and M/s. LLM Appliances Ltd. are manufacturing Mixies, Table Top Wet Grinders falling under heading 85094010 and Electric Fans and Electric Rice Cookers falling under Chapter Heading 84145190 and 85166000 respectively and clearing the goods on payment of appropriate Central Excise duty on Retail Sale Price (R.S.P.) as per Section 4A of the Central Excise Act. The period of dispute in these appeals is September 2011 to September 2013. There is no dispute on the fact that the impugned goods are covered under Section 4A and also listed in the Notification No.49/2008 as amended for availing the abatement. The main dispute is that whether the impugned goods supplied to TNCSC, which are intended for free distribution to the women beneficiaries belonging to families holding family cards eligible for drawal of rice as per the T.N. Government scheme are to be assessed under the provisions of Section 4 or Section 4A of the Central Excise Act, 1944. 8. The adjudicating authority held that TNCSC is a "service institution" and as per L.M.R sales to institutional consumer are excluded from the declarati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... res excluding cement and fertilizer sold in bags upto 50 kg; and (b) packaged commodities meant for industrial consumers or institutional consumers. Explanation: For the purpose of this rule, - (i) "institutional consumer" means the institutional consumer like Transportation, Airways, Railways, hotels, Hospitals or any other service institutions who by packaged commodities directly from the manufacturer for use by that institution. (ii) "industrial consumer" means the industrial consumer who buy packaged commodities directly from the manufacturer for use by that industry." As per Explanation to the above Rule, the "institutional consumer" and the "industrial consumer" has been excluded from the purview of the Standards of Weights and Measures Act. In the present case, the adjudicating authority held that TNCSC is covered under the exclusion clause as they are service institution. 10. We find that the Tribunal in the case of PG Electroplast Ltd. (supra) has discussed the identical issue on the question of 'industrial consumer' or 'institutional consumer'. The relevant portions of the said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e activity of free distribution of CTVs among poorer section of the population of Tamil Nadu on behalf of the Govt. of Tamil Nadu, cannot be called service industry as it is not a commercial activity. "Industrial Consumers" also, as the CTVs purchased by them were not meant for use in their factories for production. Since M/s. ELCOT are neither institutional consumer nor industrial consumer, in respect of sale of CTVs by the appellant to them, MRP was required to be declared in term of SWM Rules and accordingly, the Provisions of Section 4A would be applicable. The Appellant have paid duty on this basis only i.e. on the value determined under section 4A. In view of this, the impugned order is not sustainable. The same is set aside. The appeal is allowed." 11. It is evident from the above decision that the Tribunal has clearly held that the M/s.ELCOT procured Colour Television sets for Government of Tamil Nadu for free distribution of the CTVs among the poor sections of people of Tamil Nadu on behalf of Govt of Tamil Nadu cannot be called as a "service industry" as it is not a commercial activity. Similarly, in the present case, TNCSC carried out procurement of Mixies, Table Top We ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as the 'DoT'), Mahanagar Telephone Nigam Limited (hereinafter referred to as the 'MTNL') and Bharat Sanchar Nigam Limited (hereinafter referred to as the BSNL). The purchaser did not sell these instruments to the general public but instead provided the instruments on rental basis or otherwise to their customers, meaning thereby that there was no further sale of these instruments. The product falls under sub-heading 8517 and is covered under Notification No. 9/2000-C.E. (N.T.), dated 1-3-2000 and subsequently by Notification No. 5/2001, dated 1-3-2001. It was, therefore, an admitted position that from 1-3-2000 Electronic Push Button Telephones manufactured by the assessees were specified goods and were bound to be valued for assessment with reference to the retail price under Section 4A of the Act. It is also an admitted position that on all the telephone pieces sold to DoT, MTNL and BSNL, as the case may be, the assessees had declared the MRP. The assessees got the advantage of the abatement and because of that they were required to pay lesser duty under Section 4A as compared to the duty chargeable under Section 4 of the Act on the basis of contract price. The abatement was 40% ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ne which is sold in the market. If that is so, the package would be covered under the relevant SWM (PC) Rules. We do not find anything in the SWM (PC) Rules that where a customer purchase a large number of packages, such bulk purchase itself rules out the applicability of the SWM (PC) Rules. Under Rule 2A, as it then stood, it was provided that Chapter II apply to all pre-packaged commodities. Rule 3 thereof provided that the provisions of Chapter apply to the packages intended for 'retail sale' which would mean that the sale would be for consumption by an individual or group of individual or any other consumer. There can be no doubt that the telephone instruments were to be used by the consumers. Therefore, the telephones were sold to these three instrumentalities, there is no escape from the fact that these telephones were meant to be ultimately used by the consumers and it is only with that object that the said telephones were purchased by the three instrumentalities from its manufacturers. Therefore, the sale of the telephone instruments would be covered in the term 'retail sale'. Rule 6 is thereafter very clear which requires every package to make certain declarations includin ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
