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TMI Blog2017 (8) TMI 587X X X X Extracts X X X X X X X X Extracts X X X X ..... 13/2002 - CE(NT) dated 01/03/2002, as amended vide Notification No. 10/2003(NT) and dated 01/03/2003, the product of the appellants, that is branded chewing tobacco was brought under the maximum retail price (MRP)/retail sale price RSP, based assessment, to be assessed to duty under Section 4A of the Act. Accordingly, the appellant started payment of excise duty on their product, irrespective of the size of the package, under RSP based assessment. The appellant started manufacture of 9gm. purias/pouch of their product with effect from 01/03/2004 to 31st of March 2008. Further facts are that the appellant vide the letter dated 19/02/2004 addressed to the jurisdictional Assistant Commissioner, with a copy to the Range Officer informed as under: "It is for your information that we are packing chewing tobacco MOAR CHHAP in a pack of 9gm each. These purias of 9gm each are packed in a wholesale pack containing 20 Purias. The retail sale pack containing 9gm is exempt from marking MRP under Rule 34 of the Standard of weights and measures (packaged commodities) Rules, 1977. In view of the above facts and legal provisions we will assess the duty of excise under Section 4 of the Central exc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... currently. 5. It appeared to Revenue that the party was engaged in packing their goods into 9.0gms package, commonly known as Purias/pouches in the trade parlance. The packages of 9.0gms where further packed in multi-piece packets. One multi-piece packet containing 20/27 Purias of 9.0 gms having weight 180/243 gms respectively. These multi-piece packets are further packed in bags/cartons for the purpose of distribution and transportation in the wholesale trade. Whereas, clause b of Rule 34 of the Standard of Weights & Measures (Packaged Commodity) Rules, 1977 (hereinafter referred to as SWAMPCR, for short), as it existed at relevant time(as referred by the party in their aforesaid letter) reads as under: Rule 34 "nothing contained in these Rules shall apply to any package containing a commodity, if- (a) (b) the net weight or measure of the commodities, 20 gm or 20 ml or less, if sold by weight or measure. (Quantity of 20 gm or 20 ml or less has been substituted by 10gm or 10ml or less vide G.S.R. 425(E) dated 17/07/2006 with effect from 13/01/2007). Further past amendment, clause b of Rule 34 provides that the net weight or measure of the commodity is 10 gm or 10 ml or less ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... package. Provided that where individual pieces contained in a multi-piece package are packaged or labeled separately and are capable of being sold separately, each piece shall bear thereon a declaration as the quantity and the sale price thereof. Rule 17(2) - If individual pieces contained in the package do not carry retail sale price, it shall carry a declaration that they are not intended for retail sale. It appeared that the exemptions what in Section under Rule 34(b) is not available to the appellant in view of the provisions of erstwhile Rule 17 of SWAMPCR and accordingly, they were required to mention the MRP on the multi-piece package, and thus liable to be assessed to Excise Duty on the value as applicable under the provisions of Section 4A of the Act. Further, reliance was placed on the ruling of the Apex Court in the case of Jayanti Food Processing Private Ltd versus CCE, Rajasthan 2007(215)E.L.T. 327(SC) wherein the Hon'ble Supreme Court inter alia, held as under: "When we read these rules along with provisions of Section 4A of the Act, it would be clear that where there is a general exemption like Section 34, under the SWM (PC) Rules, such goods and/or packa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appear to be applicable to multi-piece packages. Based on the above opinion of the Law Ministry, it is clarified that declaration of retail sale price of multi-piece packages and individual pieces contained in such multi-piece packages (if such individual pieces are capable of being sold separately) are statutorily required under Rule 17(1) of the SWAMPCR, 1977. In view of the statutory requirements for declaration of retail sale price under the SWAMPCR for multi-piece package, it is clarified that in respect of multi-piece packages of a commodity intended for retail sale and which are notified under Section 4A, they shall be assessed to excise duty under the provisions of Section 4A of Central Excise Act, 1944. Upon such premises it appeared to Revenue that the appellants are required to pay duty on the basis of MRP under the provision of Section 4A of the Act and accordingly differential duty was computed and the duty found short paid have been demanded vide the eight show cause SCN No. Period Qty. Demand 02/09/dt.04/04/2009 2003 to 2007-08 9gms 2,41,51,532.00 03/2009 dt. 04/04/2009 March 05 to 2007-08 8gms 1,35,88,049.00 36/Adc/09 dt.04/04/2009 2007-08 7.5gms ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s inter alia admitted that they clear the Purias/pouches packed in the packages with MRP printed on it to the traders who sell it in the retail market. In view of these facts, I observe that the pouches/purias cleared by the party are in multi-piece package." 9. The Learned Counsel have taken us to the complete statement of Shri V. K. Tyagi and submitted that there is no such admission on the part of Shri V. K. Tyagi, that the bigger packets of the pouches containing 20/27, and/or more than 10 Purias marked with MRP. Mr. V. K. Tyagi has categorically stated that it is only the individual Puria of 9gms or less, which is marked with MRP and the weight. 10. Learned AR for Revenue have relied on the impugned order. 11. Having considered the rival contentions we find that wholesale package have been defined in the Package Commodity Rules as meaning a package containing (i) Retail packages, where such first mentioned package is intended for sale, distribution or delivery to an intermediary and is not intended for sale direct to a single consumer, or (ii) a commodity sold to an intermediary in bulk to enable such intermediary to sell, distribute or deliver such commodity to the consume ..... X X X X Extracts X X X X X X X X Extracts X X X X
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