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M/s Godrej Consumer Products Ltd. Versus CCE & ST, Siliguri

Method of valuation - MRP based valuation - Powder Hair Dye (PHD) packed in sachets of 3 gms. 6/8 such sachets are put in a mono-carton - Section 4 or Section 4A of Central Excise Act, 1944? - Held that: - In view of the categorical clarifications issued by the Competent Authority, we find no merit in the conclusion drawn by the Original Authority regarding non-applicability of the Legal Metrology provision to the impugned goods - the Revenue did not bring any evidence to support the claim that .....

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Final Order No.F/76454-76455/2017 - Dated:- 3-8-2017 - Shri P.K. Choudhary, Member (Judicial) And Shri B. Ravichandran, Member (Technical) Shri Abhishek Rastogi, Advocate for the appellant Shri K. Choudhary, Authorized Representative (DR) for the respondent ORDER Per. B. Ravichandran :- These two appeals are on identical issue and are accordingly taken up together for disposal. The appellants are engaged in the manufacture of, among other things, Powder Hair Dye (PHD) liable to Central Excise d .....

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spute. The question of limitation was also raised against the demand by the appellant. 2. The Department held a view that the appellants were wrongly discharging duty by valuing the product under Section 4A (MRP based valuation), whereas the duty should have been discharged under Section 4 under normal transaction value. Proceedings were initiated against the appellant which resulted in original orders dated 21/12/2012, 10/07/2014 and Commissioner (Appeals) order dated 19/01/2012. The appellants .....

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ection 4 is erroneous and same requires re-computation in case the valuation has to be done under Section 4. The matter was remanded back to the Adjudicating Authority for deciding the issue afresh. The cases were decided in terms of the above directions. The Original Authority in the impugned orders held that the mono-cartons in which PHD sachets were cleared is required to be assessed under Section 4. The demand was recomputed in terms of Section 4. The present appeals are against these denovo .....

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ered as a retail package. The Original Authority did not consider these opinions submitted by the appellant during the course of denovo adjudication. He relied on a letter dated 16/09/2015 issued by Legal Metrology Unit of Sikkim. However, a copy of reference made to the said Department by the Commissioner is not available. The opinion dated 16/09/2015 did not bring out the full facts applicable to the present case. In fact the conclusion only states that MRP on the package of sachets whose net .....

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s and also net quantity requirement. Legal Metrology Division, Department of Consumer Affairs, Government of India, vide their letter dated 30/11/2015 also categorically clarified that mono-carton containing 6 or 8 sachet is a retail package and, therefore, is required to carry all mandatory declarations as provided under Rule 6 of Packaged Commodities Rules. Directorate of Legal Metrology, Government of West Bengal, vide their letter dated 28/12/2015 clarified that clarification of the Director .....

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in the trade as a retail pack, intended for sale. The retail outlets including reputed chain of stores like BIG Bazar etc. display the mono-cartons and sell the same to the customer in retail. The learned Counsel submitted that all the evidences clearly indicate that the products are required to be assessed in terms of Section 4A of the Act. He also submitted that as the appellant is enjoying area based exemption the whole issue is revenue neutral. Only because of certain disputes in interpretat .....

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of collusion, fraud etc. in a case involving interpretation of the provision of Legal Metrology. 5. The learned AR reiterated the findings of the Original Authority. He submitted that from 17/07/2006 the reference to multi piece packs (cartons) would have no relevance for excise assessment and only individual retail packs, sachet which are capable of being sold in retail should be considered as a primary package for excise purpose. He submitted that a reference was made by the Department to the .....

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PHD and the mono-carton in which 6/8 such sachet are put and cleared by the appellant. Admittedly, both the sachet as well as the mono-carton carried MRP. The Tribunal while remanding the matter observed that the opinion of the Competent Authority who are entrusted with implementation of the provisions of Legal Metrology Act and rules made thereunder are to be followed to arrive at the conclusion. Both the Department and the appellants did approach the Legal Metrology Department of Government o .....

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t on 04/12/2015 is very elaborate and contained all the facts relevant in the case. On such reference, the Deputy Director of Legal Metrology Unit, Government of Sikkim clarified as below :- The undersigned is directed to refer to your letter dated 4th December 2015 on the subject mentioned above and to state that under sub-Rule k of Rule 2 read as retail package means the packages which are intended for retail sale to the ultimate consumer for the purpose of consumption of the commodity contain .....

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abeled as required under the rules . It is clarified that a Mono Carton containing 6 or 8 sachets, the individual Sachets of each Net Weight of 3 gms. Is exempted from the preview of the Legal Metrology (Packaged Commodities) Rules 2011 vide Sub-Rule (a) of Rule 26. It is further clarified that, a Mono Carton containing 6 or 8 sachets the total Net Weight if it contains 6 Sachets is 18 gms. And if it contains 8 Sachets is 24 gms. Respectively. Under the proviso of Sub-Rule (a) of Rule 26 read as .....

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gy Division, Department of Consumer Affairs, Government of India on 06/11/2015. The Assistant Director, Legal Metrology vide his letter dated 30/11/2015 clarified as below :- The undersigned is directed to refer to your letter dated 6th November, 2015 on the above mentioned subject and to state that the individual Sachets of Net Weight 3 gms. are exempted from the purview of the Legal Metrology (Packaged Commodities) Rules, 2011 vide Rule 26. 2. Further, it is to state that clause (iii) of Rule .....

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by the Director of Legal Metrology, Government of India, is final and binding on the State authorities. 9. In view of the categorical clarifications issued by the Competent Authority, we find no merit in the conclusion drawn by the Original Authority regarding non-applicability of the Legal Metrology provision to the impugned goods. Further, the Original Authority did not examine these clarifications submitted by the appellant. He simply stated that he had obtained opinion as per the directions .....

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