1. These two appeals of this same appellant on similar issue are taken up for disposal after waiver of pre-deposit required.
2. a) The appellant are manufacture of certain goods which are of Powder Hair Dye falling under Chapter Sub-Heading 33.05 of Central Excise Tariff Act (Godrej Permanent Hair Dye and Godrej Kali Mehendi).
The packing is 3gm sachets and 3 such sachets are put in a carton. Net weight of the product in each carton is 9gms.
b) The issue involved whether the product as above and taken out in this manner cleared on payment of duty by the appellant are required to duty levied on value as per Section 4 or Section 4A of the Central Excise Act on MRP (Maximum Retail Price declared on Package.) c) The relevant notification applicable in this two case have the period July 2001 to December 2002 are notification No. 5/2001-CE(NT) dated 1.3.2001 and notification no. 13/2002-CE(NT) dated 1.3.2002, which have been issued and bring goods falling under chapter 32.05 of the Central Excise Schedule in the ambit of Section 4A (2) of the Central Excise Act, 1944. Rate of duty and classification for the product specified as is not in dispute.
d) The department view is in para 3.4 of the show cause notice which is reproduced below.
"3.4 Exemption under Rule 34 applies to a package containing a commodity, which refers to a single unit. It is distinct from a package containing several packages, which in turn contain a pre-packed commodity (i.e. a package containing several units).
Therefore, 'multi-piece package' defined under Rule 2(j) of SOWM (PC) Rules, does not come under the purview of Rule 34 of SOWM (PC) Rules. In other word, the dispensation provided for under Rule 34 is for 'package containing single unit of commodity' and not for packages containing several such units (package containing prepacked commodities)''.
Any packing containing a net quantity of less than 10 gms or 10ml does not require to carry any declaration in respect of Maximum Retail Price under Rule 34(b) of the Standards of Weights and Measures (Packaged Commodities) Rules. Since the Appellants' packing contains only 9 gms of the commodity, there is no statutory obligation to declare the MRP. Section 4A of the Act is attracted only when the goods are required to bear the MRP statutorily under the Standards of Weights and Measures Act or under any other law for the time being in force. As the packing contains a net quantity of only 9gms and such packing is not required to carry MRP statutorily under the Standards of Weights and Measures Act, the Appellants' products cannot be assessed under Section 4A, but is required to be assessed under Section 4 of the Act. A copy of the relevant provisions of the SOW & M(PC) Rules.
3. The reading of Circular No. 341/64/97-TRU dated 11^th August 1997 indicates, that Section 4(A) applies only when there is a statutory requirement of affixing/declaring MRP. When such manufacturers voluntarily affixed MRP, they shall not be charged the duty on the basis of Section 4A of the Act and notification. While Letter No.103/1/97-CX.3 dated 30^th April 1998 from the Board to the Chief Commissioner of Central Excise, Vadodara indicates that sachets of 8ml shampoo is not exempted under Rule 34(1) (b) of the Standards of Weights and Measures Act/Rules and therefore they would be covered by levy of duty under Section 4A of the Act (these instruction were withdrawn vide circular dated 31-7-1998). Circular No. 411/44/98-CX vide para 4 thereof, reiterated instructions No. 341/645/97-TRU dated 11.8.1997. The instruction dated 31.7.1998, clearly provides under para 2 thereof, Section 4A to be applicable only when the MRP was affixed under a statutory requirement. There is another instruction circular issued by CBEC No. 492/58/99-CX dated 2.11.1999 which in para 2 and 3 provides as under.
The matter has been examined. Multi-piece package has been defined under Rule 2 of the Standards of Weights and Measures (Packaged Commodities) Rules, 1977 as follows: "multi-piece package" means a package containing two or more individual packaged or labelled 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 cakes net weight 20g each, total net weight 100g" is a multi-piece package.
Rule 6 of the aforesaid rules requires declarations of certain particulars to be made on every package intended for retail sale.
Retail 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 piece 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 provision fo not apply to a package containing a commodity if the net weight or measure of a commodity is 10grams 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 10grams or 10ml or less, even though the net quantity of such multi-piece package exceeds 10grams or 10ml would be covered by the above exemption. Hence they would not required to be assessed to excise duty on the MRP prices under Section 4A of Central Excise Act, 1944.
The matter has been examined in consultation with the Law Ministry.
The Law Ministry has given the opinion that the exemption under Rule 34(b) is applicable to a package containing a commodity and this exemption does not appear to be applicable to multi-piece packages.
Based on the above opinion of the Law Ministry, it is clarified that the declaration of retail sale price of multi-piece packages and individual pieces contained in such multi-piece package (if such individual pieces are capable of being sold separately) is statutorily required under Rule 17(1) of the Standards of Weights and Measures (Packaged Commodities) Rules, 1977.
In view of the above statutory requirement for declaration of retail sale price under the Standards of Weights and Measures (Packaged Commodities) Rules, 1977 for multi-piece packages, 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.
4. Considering the submission made by the Ld. Advocate for the appellant, it is submitted that the circular in para 2 reiterates the correct legal position under Rule 34 (b). Therefore, the clarification in para 3 in a sweeping manner that all multi-piece packages (without specifying the net content of the product) being not eligible for the exemption under Rule 34 (b) is contrary to law.
It appears that the clarification in para 3 is to be constructed to cover only the type of multi-piece packages regarding which the query was made by some manufacturers. Obviously if the net content of the multi-piece package is in excess of 10gms or 10ml, exemption from declaration of MRP under Rule 34(b) is not applicable to such packages. It is further submitted that if the circular is so read, then the packages of the type involved in the present appeals i. e.
multi-piece package containing less than 10gms 10ml will he eligible for exemption under Rule 34(b).
If it is the contention of the Department that clarification in para 3 applies to all multi-piece packages irrespective of the net content of the commodity being less than 10gms or 10ml or more than 10gms or 10ml, then it is submitted that the circular is contrary to law and therefore is not binding on the assessee.Itel Industries Pvt Ltd v. CCE, Calicut (Para 7-c and para 21 & 22) (ANNEXURE-8)Videocon International Ltd. v. CCE, Aurangabad (Para And Reading the Boards instructions on the subject, we find force in the plea made by the Ld Advocate and cannot uphold the interpretation that such multi packages would be chargeable to duty as per provision of Section 4A. It is also found that Board vide Circular No.625/16/2002-CX dated 28.2.2002 vide para 2 thereof reiterates that Section 4A applies only where manufacturer is legally obliged to print the MRP on the packages of the goods. Para 5 of this circular states the position as contained in circular dated 11.8.1997 and further clarifies the application in respect of all goods, whether notified under Section 4A or not which are not statutorily required to declare the MRP. There is another circular No. 639/30/2002-CX dated 24.5.2002 which clarifies that when more than one retail price is declared on package, then the highest of two prices will be taken for the purpose of assessment under Section 4A (Circular No. 673/64/2002-CX dated 28^th October 2002) seeks to bring uniformity in valuation of multi-piece packages under different circumstances. Further, it also modifies the earlier circular dated 24.5.2002 to this extent, that if one of the two prices declared on the package is scored out then such scored out MRP should be ignored. From the circulars issued time to time it is apparent that the view has consistent been that if a manufacturer is not legally required to be declare the MRP on a package, then the provisions of Section 4A of the Central Excise Act will not be applicable for ....... Of assessment of duty on such packages. Rule 34B of the Rules under Standard and Weight and Measures Act is very clear and unambiguous. The Sub-rule (b) thereof, provides that the provisions of the Packaged Commodities Rules will not be applicable where the net weight or measure of the commodity contained there in, is 20gm or 20ml or less. The second proviso thereto relates to declarations in respect of Maximum Retail Price, net quantity. When these two proviso of Rule 34(b) are read together it is clear that the declaration in respect of Maximum Retail Price and the net quantity is not required to be made if the net content of the packages is less than 10gms or 10ml. Therefore, the Appellants' multi-piece packages having only 9gms in the multi pack under consideration is clearly exempt from the requirement of declaration of MRP under Standard Weight and Measures Act. In other words, it is not legally obligatory declare MRP of such packages.
5. The first proviso to Rule 34(b) provides that the exemption contained in Sub-rule (b) will not apply to package containing drugs or medicines. Wherever relaxation was not to be granted, from MRP, the rule specifically mentions the same . The product herein is not mentioned under Rule 34 of the Standard and Weight and Measures Act exclusion. The package will not to be require to declare MRP, therefore Section 4A of Custom Act, 1944 would be not applicable.
6. The Ld Advocate has brought on record that Commissioners (Adjudication) and two Commissioners (Appeals) have concurrently held that the Appellants multi-piece packing (of 3 sachets of 3gms each) of powder hair dye is entitled to exemption under Rule 34(b) in the case of these very appellant for earlier periods. Departments appeal before this Tribunal, E/253/03-Mumbai dated 10.5.2004, was dismissed.
Therefore, we find no reason to arrive at a contrary decision. It is therefore held that the package herein is not liable for assessement to duty under Section 4A of the Central Excise Act 1944.
7. In view of the fact that duty has been paid under Section 4 and no duty further were required to be paid under Section 4A of the Central Excise Act. We do not find any reason to call for the demands and other consequences. Order impugned are therefore required to be set aside.
8. When it is found that the above issue was raised from time to time and the issues were not clear to the officers and the assessee and Board had also changed the views, we find the plea of limitation raised by Ld Advocate is to be upheld.9. In view of the above the orders are set aside. The appeal is allowed.