TMI Blog2007 (10) TMI 101X X X X Extracts X X X X X X X X Extracts X X X X ..... n notified under Section 4A of the Central Excise Act for the purpose of valuation. 2. During the period of dispute, the appellant had cleared Indica Herbal Powder Hair Dye on payment of duty based on assessable value determined under Section 4 of the Central Excise Act. During most part of the period, they had also cleared Chick Kali Mehendi Power Hair Dye on payment of duty likewise. The "Indica" hair dye was cleared in mono-cartons, each containing 6 sachets of 8 grams each of the commodity. The other hair dye was also cleared in mono-cartons, but each containing 10 sachets of 4 grams each of the commodity. All the clearances were made to a dealer namely M/s. Cavinkare Pvt. Ltd. The appellant considered each sachet as a retail pack a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 001 - do - March 2000 to Oct. 2000 Rs.43,57,356.00 4. 30.10.2001 - do - Nov. 2000 to June 2001 Rs.57,03,452.00 5. 26.6.2003 - do - Feb. 2003 to March 2003 Rs.8,98,820.00 4. The above demand was contested by the appellant, who, in their replies to the show-cause notices, submitted that the hair dyes in sachets were marketable as such without mono-carton, that what was intended for retail sale was the sachet pack and not the mono-carton pack, that Rules 6 and 17of the Standards of Weights and Measures (Packaged Commodities) Rules [SWM (PC) Rules, for short] were not applicable to the sachet packs of the hair dyes and these packs were exe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Excise Act. He has also imposed total penalty of Rs.17.00 lacs on the party under Rule 173Q of the Central Excise Rules, 1944 and Rule 25 of the Central Excise Rules, 2002. 7. Neither side urged us to wait for the result of Writ Appeal No. 4136 of 2003 pending before the Hon'ble High Court inasmuch as there was no stay of our proceedings. However, the SDR submitted that, on an issue identical to the one involved in the instant case, the South Zonal Bench, Bangalore, had disagreed with the West Zonal Bench, Mumbai and had referred the issue to a larger Bench in the case of Roys Industries Ltd. Vs. CCE, Hyderabad [2006 (201) ELT 609 (Tri. Bang.)]. The SDR wanted us to wait for the decision of the larger Bench. In this context, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e case of Varnica Herbs (wherein the total net weight of hair dye in a multi-piece pack (mono-carton) was 6x8 gms. = 48 gms.) was factually distinguishable from theirs. The Bench noted that the Hon'ble High Court had clearly noticed the weight of individual pouch in that case to be less than 10 gms. It, however, also noted that the Hon'ble High Court had, without noticing the statutory requirement of cosmetics having to be sold by weight or measure, recorded the finding that the article (hair dye) was not intended to be sold either by weight or by measure and had, on this basis, held that the exemption under Rule 34(1)(b) was not available to the goods. The larger Bench considered the relevant paragraph 15 of the High Court's judgment i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... following conclusion:- "15. Considering submissions from both sides as well as the cited case laws, we are of the opinion that in view of specific legal requirements under the SWMR that cosmetics are to be sold by weight or volume, quantities of cosmetics weighing less than 10 gms, even though contained in multi-pack sachets, will be exempt under Rule 34 of SWMR and consequently Section 4A of the CEA will not have any application to such multi-packs. We are also of the view that the observation of the Honourable Madras High Court in Varnica (cited supra) to the effect that hair dyes are not intended to be sold by weight or measure cannot be taken as a binding precedent as it has been rendered per incuriam without noticing the lega ..... X X X X Extracts X X X X X X X X Extracts X X X X
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