TMI Blog2017 (11) TMI 1514X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 4A ibid. The appellant has referred to Rule 2A of Standards of Weights and Measures Rules (presently Legal Metrology Rules) to contend that their depots where the goods are being transferred are industrial consumers for the purposes of Rule 2A, hence they will be excluded from the provisions of declaring RSP - We do not agree with those propositions of the appellant. Rule 2A of Standards of Weights and Measures Rules define industrial consumer as those consumers who buy packaged commodities directly from the manufacturers / packers for using the product in their industry for production etc. No doubt, the packages which are cleared by the appellant to their depots registered as manufacturing premises, undergo processing of repacking / relabeling which are deemed manufacture for the purposes of Central Excise levy. Whether deemed manufacture can be equated with actual production? - Held that: - as per Oxford Dictionary, the activity of manufacture is very often synonymously used for production. However, an activity involving repacking and relabelling really does not create a new product, name or character or use but is however deemed to be manufacture. Such manufacture by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gistered as manufacturing locations. Appellants procure automobile parts from suppliers and clear and sell it to Hyundai Genuine Parts. They were paying duty on the sales / clearance of automobile parts to the dealers. From investigation conducted by the department, inter alia, it appeared to the department as under:- a. Mobis are procuring automobile parts from various Vendors subjecting them to packing/repacking, affixing part identification label, MRP label which amounts to manufacture under Rule 2 (f)(iii) of Central Excise Act 1944 and clear them on sale to buyers by paying central excise duty on the value arrived at on the basis of Retail Sale Price under Section 4A of the Central Excise Act, 1944. b. They were clearing such automobile parts on stock transfer basis to their various Depots (Central Excise Registered), in the same package as that of the sale to Dealers, including the affixation of MRP label, but were not paying duty on the basis of Retail Price Sale under Section 4A of the Central Excise Act, 1944 but under Section 4 of the Central Excise Act, 1944 read with Rule 8 of the Central Excise (Determination of Value of Excisable Goods) Rules, 2000. c. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion is stock transfer and not a sale and Standard of Weights and Measures Act and Section 4A of Central Excise Act, 1944 are not applicable when the transaction is not a sale. The appellants transaction do not fall under the ambit of Standard of Weights and Measures Act as there is no element of sales. For adducing the fact that Standard of Weights and Measures Act is not applicable to the appellant's transaction, it is reiterated that the package enumerated in the Act is neither a retail package nor the transfer of the same is retail sale as contemplated under the Act. (ii) The Larger Bench of the Tribunal held in the case of Jay Yushin that revenue neutral situation comes about in relation to the credit available to the assessee himself, therefore in the instant case, the duty payable/paid at Chennai plant is available as credit to the appellants depots located at Mumbai / Delhi / Kolkata even if valued at Section 4A from Chennai. The Standard of Weights and Measures Act contemplates a sale but in the instant case it is a stock transfer, which is known under section 6A(1) of the CST Act as movement of material other than by way of 'sale'. Hence the disputed tra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from the department at any point of time. However, the show cause notice was issued after a considerable gap only on 19.12.2013 for the period August 2008 to August 2012. Hence, even if it is held that the value adopted for stock transfer of goods to the depots should be arrived at under section 4A for the purpose of assessment, bulk of the period involved will be hit by limitation, as duty liability was discharged under section 4 assessment on CAS4 method only as advised by the department themselves. (viii) On the issue of penalty, ld. counsel submitted that the entire issue is revenue neutral and moreover, the manner of assessment of the impugned goods was conveyed by them as early as in 2009. There is no mens rea involved and the issue of whether the assessments are required to be done under section 4 or 4A itself was the subject matter of dispute. Hence, there can be no penalty imposable on the appellant. 4. On the other hand, ld. Commissioner Ms. Hemavathi supports the impugned order. She takes us to para 10 of the impugned order, wherein it is observed that the taxpayer imports raw materials and child parts which are repacked / relabeled after inspection at their I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... per the provisions of the Legal Metrology Act, 2009 and Rules thereunder (erstwhile Standards of Weights and Measures Act, 1976 and Rules thereunder), the assessable value is worked out as the RSP less any abatement as may be allowed by Notification. Discernably, unless the goods are specifically exempted by the said Act /Rules from declaring the RSP, all such packages will necessarily fall within the ambit of Section 4A valuation. 6.3 The appellant has referred to Rule 2A of Standards of Weights and Measures Rules (presently Legal Metrology Rules) to contend that their depots where the goods are being transferred are industrial consumers for the purposes of Rule 2A, hence they will be excluded from the provisions of declaring RSP. The appellant has also taken recourse to the ratio laid down by the Hon ble Apex Court in the case of Jayanthi Food Processing Vs. Commissioner of Central Excise - 2007 (215) ELT 327 (SC) to contend that in order that for a package should be properly described as retail package the sale has to be through the retail sale for consumption by an individual or a group of individuals . 6.4 We do not agree with those propositions of the appellant. Ru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd any infirmity with the cogent finding of the adjudicating Commissioner in paragraphs 11.2.4 to 11.4 of the impugned order, which are reproduced as under:- 11.2.4 As already stated above, the word production occurring in the definition of industrial consumer cannot by any stretch of interpretation be equated to manufacture as defined in Section 2(f) of the CEA, 1944. The words for using the product in their industry for production have to be understood in their normal, ordinary sense. In other words, for the depots to qualify as industrial consumers , they should have used the goods received from the factory in further production process, whereby a new or fully finished excisable product emerges. Instead, it is seen that usually the depots clear the goods received from the Irungattukottai Unit, as such, to their dealers. In some of the cases, especially subsequent to June, 2010, the only activity they undertake is affixing of MRP label on the packages before clearing them to their dealers. The attempt of the Taxpayer to qualify this activity of labelling / relabeling as a manufacturing process for the purposes of the SWM Act, not correct as the said Act and the Rules made th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ses them in its industry and that it results in production of something else. We find no warrant to import the artificial definition of manufacture in the Central Excise Act in interpreting clause (b) of the Explanation to Rule 2A of PC Rules. It must be noted that the proviso to Section 3 (2) of the Customs Tariff Act which is modelled on the same lines as Section 4A of the Central Excise Act borrows the scheme of retail pricing from the SW M Act and Rules, but it is not vice-versa. The SW M Act or the Rules framed thereunder are not inspired by the provisions of the Central Excise Act. They do not purport to borrow the pattern and scheme of Central Excise Act. Thus, viewed from any angle, we are of the view that the applicant canot be treated as an industrial consumer within the meaning of the definition contained in clause (b) of the Explanation to Rule 2A of the PC Rules. Rule 2A cannot come to the aid of the applicant in extricating itself from the obligation to declare and print the maximum retail price on the product known as revitalizing toner falling under 3304. Therefore, the maximum retail price which the applicant is statutorily bound to declare and affix on the packa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o whether in respect of such clearances of Spare Parts Division of Automobile manufacturers, the duty has been paid on the value determined under Section 4A . 11.4 For all the above reasons, I have no hesitation in holding that, the clearances from the Irungattukottai Unit to the depots are covered under the SWM Act, 1976, and as a result fall within the purview of Section 4A of the CEA, 1944. 8. However, on the matter of the entire proceedings being hit by limitation, we find some merit in the contentions of the appellant. It is not in dispute that the data and information brought out in the show cause notice are based only on the statutory records available with the department. Appellants have also averred that department audit and CERA audits were regularly conducted, it is also not in doubt that the ER1 returns filed by the appellant during the material period of dispute, also clearly indicated the method and manner of the disputed clearances. In fact, the LTU letter dated 10.6.2009 seeks clarification for the ER1 returns for the year 2008 09 only after scrutiny of the returns. It is pertinent to note that the very same letter also notes that the goods are cleared on ..... X X X X Extracts X X X X X X X X Extracts X X X X
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