TMI Blog2016 (4) TMI 13X X X X Extracts X X X X X X X X Extracts X X X X ..... nless there is an element of sale, as contemplated in Section 2(v), Rule 6(1)(f) will not be attracted and thus such package would not be governed under the provisions of SWM (PC) Rules which would clearly take such package out of the restricted arena of Section 4A(1) of the Act and would put it in the broader arena of Section 4 of the Act The ratio of the above case law is squarely applicable to the present case as the goods are sold to the industrial consumers who in turn supplied these goods as free gifts and these are not ultimately sold in retail sale either by the consumer or by the person who purchases it or by the ultimate buyer. Thus we hold that the detergent powders cleared to the industrial consumers are exempted from M.R.P. and not covered under Section 4A. Accordingly, we hold that differential duty confirmed in the impugned orders are liable to be set aside - Decided in favour of assessee - Appeal Nos. E/1236/2004 & E/1237/2004 & E/MISC/415, 416/2012 & E/1368/2004 & E/1369/2004 - Final Order No.41763-41766/2015 - Dated:- 6-7-2015 - SHRI R.PERIASAMI, TECHNICAL MEMBER AND SHRI P.K. CHOUDHARY, JUDICIAL MEMBER For the Petitioner : Shri Raghavan Ramabadran, Ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /s.Henkal India Ltd., Karaikal are manufacturers of Henko Power Pearls Detergent Powder and cleared the goods to M/s.Calcutta Chemical Company Ltd., Chennai. and M/s.Detergents India Ltd. Coimbatore for free distribution along with their products like Margo soap, Neem Soap etc. Respondents paid the entire duty on the basis of transaction value under Section 4 of the Central Excise Act. Two show cause notices were issued covering the period December 2001 and February 2002 and June 2002 to August 2002 for rejecting assessment under Section 4 and proposing to demand differential duty based on M.R.P under Section 4A. The adjudicating authority in his OIO Nos.6/03 dt.27.3.2003 and 8/03 dt. 30.4.2003 dropped both the SCNs. Revenue preferred appeals before Commissioner (Appeals) against the adjudication orders. Commissioner (Appeals) upheld the impugned order and rejected the Revenues appeals. Hence Revenue filed these appeals before Tribunal. 5. ARUMENTS OF THE ADVOCATE FOR THE ASSESSEE 5.1 In the case of assessee s appeal, he submits that detergent powders were sold for retail sale and also to the industrial consumers i.e. M/s. Duncan s India Ltd. Duncan s Tea Ltd. M/s. Tat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 4 which is not correct. He submits that even if the goods are sold as free gifts, once the goods are covered under M.R.P., Section 4A should be applicable. He submits that Board s circular dt. 28.2.2002 is not applicable and also submits that retail sale includes sales to industrial consumers for their own consumption. He relied the following case law :- (1) Macneill Engineering Vs CCE-2001 (134) ELT 173 (Tri.) (2) CCE Mumbai Vs Voltas Ltd.-1987 (27) ELT 718 (Tri.) and (3) BPL Telecom (P)Ltd. Vs CCE Cochin-2004 (168) ELT 251 (Tri.-Bang.) 7. After hearing both sides, we find that the short issue relates to whether goods cleared to industrial consumers by the assessee as free supply to be assessed under Section 4A or Section 4 of the Central Excise Act. In both the cases, there is no dispute on the fact that these goods were supplied to industrial consumers for their own consumption. In the case of assessee s appeals, we find that the facts are not under dispute. The period of dispute relates to May 2002 to March 2003. The detergent powders are sold to the consumer i.e. M/s. M/s.Duncan s India Ltd., M/s. Duncan s Tea Ltd. M/s.Tata Tea Ltd. who in turn give these ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be the satisfaction of a particular condition that the packages of such goods are required under the SWM Act and the Rules made thereunder to declare the MRP. The Tribunal has even erred in holding that the circular dated 28-2-2002 is not applicable to the present case. A cursory glance at the circular would suggest that it is applicable to the present case where two commodities have been sold as a market strategy. 28. Shri Subba Rao also heavily relied on Para 9 of the impugned judgment and further relied on the first Explanation of Section 4A and suggested that the retail sale price would be the maximum price at which the excisable goods in packaged form may be sold to the ultimate consumers and includes all taxes, local or otherwise. The Tribunal has held, relying on the expression may be in contradistinction to the expression shall be that even if a portion of the goods are sold at a lower rate than the MRP affixed therein, the assessable value in respect of such percentage of goods will not be lowered on the ground that they have actually been sold at a lower rate. In our opinion the thrust of the Explanation I is not as the Tribunal has shown but is more on as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sale involved of the package, there would be no question of Rule 6(1)(f) being attracted. There is a clear indication in the definition of retail sale price as provided in Rule 2(r) which clearly explains that the MRP means the maximum price at which the commodity in packaged form may be sold to the ultimate consumer. Thus, the definition of sale in Section 2(v) of the SWM Act becomes relevant. Therefore, unless there is an element of sale, as contemplated in Section 2(v), Rule 6(1)(f) will not be attracted and thus such package would not be governed under the provisions of SWM (PC) Rules which would clearly take such package out of the restricted arena of Section 4A(1) of the Act and would put it in the broader arena of Section 4 of the Act. The ratio of the above case law is squarely applicable to the present case as the goods are sold to the industrial consumers who in turn supplied these goods as free gifts and these are not ultimately sold in retail sale either by the consumer or by the person who purchases it or by the ultimate buyer. 9. Further, we find that this Tribunal in the case of Butterfly Gandhimati Appliances Ltd. Another Vs CCE Chennai-III (supra) on ..... X X X X Extracts X X X X X X X X Extracts X X X X
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