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Charms Cosmetics Pvt Ltd Versus Commissioner of Central Excise, Pune – I

2017 (3) TMI 1129 - CESTAT MUMBAI

Method of Valuation - transaction value u/s 4 or MRP based value u/s 4A - toothpastes in tubes branded as ‘Calcium Prudent’ - destined for distribution by the Canteen Stores Department (CSD) - institutional consumer or not - it was contended that goods not required to adhere to Standards of Weights & Measures (Packaged Commodity Rules), 1977, have the ‘retail selling price’ affixed on the packing - Held that: - The Canteen Stores Department (CSD) is wing of the Ministry of Defence. It is a presi .....

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- A ‘maximum retail price’ is affixed on the impugned package does not, of itself, render the goods liable to comply with the provisions of the law relating to ‘maximum retail price’ - whether that of legal metrology or of levy of excise duty. It is the requirement of compliance with the Standard of Weights & Measures (Packaged Commodity) Rules, 1977 that does. With the exclusion of institutional buyer from the ambit of the Rules, the affixing of retail sale price is not mandated on the impu .....

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bhudesai, Superintendent (AR) for the respondent Per: C J Mathew: Issue for determination in these three appeals is the recourse to section 4A of Central Excise Act, 1944 for computing assessable value when goods, though not required to adhere to Standards of Weights & Measures (Packaged Commodity Rules), 1977, have the retail selling price affixed on the packing. At stake is the differential duty of ₹ 53,40,816 confirmed as recoverable owing to assessment having been made under sectio .....

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CSD) of Ministry of Defence, Government of India. That these tubes, as well as the inner cartons, have the maximum retail price printed on them is not in doubt. 3. It is the contention of Central Excise authorities that with the inclusion of toothpastes in notification no. 9/2000-CE (NT) dated 1st March 2000, and the successor notification no. 13/2002-CE (NT) dated 1st March 2002, these goods are to be assessed under section 4A of Central Excise Act, 1944. Differential duty computed after provid .....

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1th June 2006, concurred with the findings of the original authority. Hence these three appeals before us which, being on identical grounds, we dispose off in this common proceedings. 4. The original and first appellate authorities have held that the goods cleared by appellant are not exempted under rule 34 of Standards of Weights & Measures (Packaged Commodity) Rules, 1977 and that circular no. 625/16/2002 - Central Excise dated 28th February 2002 of Central Board of Excise & Customs is .....

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ning legal metrology. It is to be invoked when the law relating to affixing of specified details, including maximum retail price , is mandated. It is now settled law that the benefit of assessment or the burden of dutiability under this special provision is to prevail when the twin conditions of inclusion of the goods in the notification under section 4A as well as coverage under the Standards of Weights & Measures (Packaged Commodities) Rules, 1977 are in place. The former notwithstanding, .....

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ramed with that objective. Consequently, as a general rule, pre-packaged goods that are notified under section 4A of Central Excise Act, 1944 are to be assessed on the affixed maximum retail price adjusted for the prescribed abatement. There are two level of exceptions in the Rules. The first of these is the specific exclusion of goods described in rule 34 of the Rules. Likewise, rule 2A (b) excludes pre-packaged goods sold to institutional consumers and industrial consumers from the prescript .....

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um retail price , the sole prescription among the many that is pertinent to section 4A of Central Excise Act, 1944, rests not with the manufacturer but with the one who pre-packages the goods; to the extent that the two converge, the manufacturer is saddled with the responsibility to do so. The peculiarity of this consumer protection law is that an offence against this statute, if any, becomes visible only at the shelf of the retailer but the offence is attributed to the manufacturer or the enti .....

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onstrued accordingly. in rule 3 of chapter II of Weights & Measures (Packaged Commodities) Rules, 1977 cannot but be acknowledged. 9. A manufacturer who pre-packages goods may be deemed to have made its intent to cater to the retail market by affixing the maximum retail price thereon but, from the above, it would appear that a contrary intention may be made known, despite such affixing, by the character of the entity to which the goods are cleared. 10. It is an admitted fact the goods are de .....

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oods to the Canteen Stores Department (CSD). It, therefore, arises for consideration whether the Canteen Stores Department (CSD) is a retailer. In the present dispute, if the provisions of law of legal metrology is enforceable by the legal metrology officers against the Canteen Stores Department (CSD), the Rules framed under Standards of Weights and Measures Act, 1976 is applicable to the impugned goods and, by extension, section 4A of Central Excise Act, 1944. 11. The Canteen Stores Department .....

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rcement under the statute relating to legal metrology. Its avowed aim is to make goods available to its restricted clientele at prices below the maximum retail price - with that objective, it is not required to conform to the legal metrology statutes. 12. An institutional consumer, by implication of the definition of the said expression, is undoubtedly a point of sale to customer; the customer, however, is clearly distinguishable as a recipient of the service provided by such institutional consu .....

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