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TMI Blog2008 (3) TMI 12X X X X Extracts X X X X X X X X Extracts X X X X ..... ght of each pouch, as also the net weight of the commodity in 3 pouches and the maximum rate is printed on the pouches. 4. Valuation of exciseable goods for purposes of charging the duty of excise is laid down in Section 4 of the Central Excise Act, 1944 in the following terms: "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 value, such value shall, subject to the other provisions of this section, be deemed to be - (a) the normal price thereof, that is to say, the price at which such goods are ordinarily sold by the assessee to a buyer in the course of wholesale trade for delivery at the time and place of removal, where the buyer if not a related person and the price is the sole consideration for the sale." 5. Section 4A of the Act provides for mode of valuation envisaged under Section 4. It reads as under :- "4A. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the commodity in question is governed under the Standards of Weights and Measures (Packaged Commodity) Act, 1976. Indisputably again the Central Government in exercise of the powers conferred upon it by Section 83 of the Act framed Rules known as the Standards of Weights and Measures (Packaged Commodity) Rules, 1977 (the Rules). 7. Rule 2 contains the interpretation section. A distinction is made in regard to "combination package", "group package" and "multi-piece package". Multi-piece package is defined in Rule 2(j) to mean :- (j) "multi-piece package means a package containing two or more individually packaged or labeled pieces of the same commodities of identical quantity, intended for retail sale, either in individual pieces or the package as a whole; Illustration.- A package containing "5 toilet soap cake, net weight 20 g each, total net weight 100 g" is a multi-piece package." 8. Rule 6 provides for declarations to be made on every package, which reads as under :- "6. Declaration to be made on every package.- (1) Every package shall bear thereon or on a label securely affixed thereto a defini ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... flowing liquid which is sold as such, the declaration of quantity shall be in terms of the drained weight of such solid commodity." Schedule V appended to the Rules specifies the commodity in packaged form which may be sold by weight, measures or numbers as shown against the commodity, item No.25 whereof reads as under :- "25. Cosmetics including creams, Weight or measure shampoo, lotions and perfumes."Rule 17 of the Rules mandates additional declarations to be made on multi-piece packages. 9. Admittedly the valuation of the commodity for the purpose of payment of excise duty was carried out in terms of Section 4 of the Act. Respondent, however, was served with eight show cause notices dated 29th August, 2001, 26th March, 2001, 4th July, 2001, 3rd September, 2001, 30th October, 2001, 8th January, 2002, 27th March, 2002 and 16th May, 2002 in terms of Section 11A of the Act asking it as to why :- (i) Differential Central Excise duty should not be demanded and recovered under the provisions of Section 11A(1) of the Central Excise Act, 1944. (ii) Penalty should not be imposed under Rule 173Q of Central ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trong reliance in this behalf has been placed on a decision of this Madras High Court in Varnica Herbs vs. C.B.E.&C., New Delhi : 2004 (163) E..L.T. 160 (Mad.) 13. Mr. Ravinder Narain and Mr. Monish Panda, learned counsel appearing on behalf of the respondents, on the other hand, would submit that keeping in view the provisions of Rule 12(2) of the Rules, the commodity can be sold by weight or measure. It was so intended to be done as the weight of each sachet has been notified on the packet. It was submitted that the decision of the Madras High Court in Varnica Herbs (supra) was rendered per incuriam as has been held by a larger Bench of the Tribunal in Commissioner of Central Excise, Mumbai vs. Uirson Cosmetics Ltd. : 2006 (198) E.L.T. 508 (Tri.-LB). It was furthermore submitted that the notices under Section 11A of the Act having been issued beyond the period of six months, the same were barred by limitation. 14. The commodity is in powder form. It is sold in a multi piece package. Admittedly the product is packed in small packets each containing three sachets. Each sachet discloses the weight of its content ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... regard to the claim made by certain manufacturers that there were no statutory requirements for declaration of retail sale price on such packages under the Standards of Weights and Measures Act, 1976 and the Rules framed thereunder, it was stated :- "Rule 6 of the aforesaid rules requires declarations of certain particulars to be made on every package intended for retails sale. Retails sale price of the package is one such detail to be declared by a manufacturer/ packer. Further rule 17 (1) provides for declaration of certain additional details in respect of multi-piece packages such as sale price of the multi-piece package and the number of individual pieces of the commodity contained in such packages. However under rule 34, exemption in respect of certain packages have been provided. In particular sub rule (b) to rule 34 provides that the MRP provisions do not apply to a package containing a commodity if the net weight or measure of a Commodity is 10 grams or 10ml or less, if sold by weight or measure. Some manufacturers have claimed that the multi-piece package containing individual pieces of less than 10 grams or 10ml or less, even though the net quantity of suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing (P) Ltd. v. Commissioner of C.Ex., Rajasthan [2007 (215) E.L.T. 327 (S.C.)], wherein one of us (Sirpurkar, J.) was a member, this Court stated the law, thus: "We have already explained earlier that the nature of sale is of no consequence. The material consideration is that such sale should be in a 'package' and there should be a requirement in the SWM Act or the Rules made thereunder or any other law for displaying the MRP on such package. We find the requirement to be only under Rule 6(1)(f) which applies to 'retail package' meant for 'retail sale'. What is required to be printed under Rule 6(1)(f) is the 'retail sale price' of the package. 'Retail sale price' is defined under Rule 2(r) and it suggests that the 'retail sale price' means the maximum price at which the commodity in packaged form may be sold to the ultimate consumer. The Rule further suggests the manner in which the 'retail sale price' shall be mentioned on the package. It is the case of the appellant that the four litres pack was not meant to be sold as the package to the ultimate consumer and the sale was only to the intermediary or as the case may be, to the hotel. If that was so, then there is no necessity m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nto consideration for the purposes mentioned therein. After combined weight is taken into consideration for the purpose of applicability of the Rules, there is no reason as to why the said purpose shall not be considered to be a relevant factor for applying the exemption provision. Assuming Rule 2(j) was otherwise vague or unambiguous, illustration appended thereto brings out the true meaning and purport thereof. The reasoning adopted by the Madras High Court in Varnica Herbs (supra) does not appeal to us. It was rendered per incuriam. It was held to be so in Urison Cosmetics Ltd. (supra) by a Larger Bench of the Customs Excise and Service Tax Appellate Tribunal. We agree with the said opinion of the Tribunal. 24. For the reasons abovementioned the impugned judgment does not warrant any interference. The Civil Appeal Nos. 2597, 2575, 2703-2704 of 2005, 325-326 of 2006 fail and are dismissed with costs. Counsel's fees assessed at Rs. 25,000/- in each case.Civil Appeal Nos. 1029, 5069-5073 of 2007 [Re: M/s. Aero Pharma (Silvassa) Inc. 25. The assessee manufactures Lip Smoother. Each unit contains 4.3 ml. They make a package of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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