Full Judgment
Per: P.G. Chacko, Member (J),
This appeal of the Revenue is directed against the appellate Commissioner's order upholding the order of adjudication passed by the Deputy Commissioner. Both the lower authorities rejected the proposal as contained in the show-cause notice for assessment of the subject goods in terms of Section 4A of the Central Excise Act. They held that the goods in question in the form it was cleared by the respondent was exempt under Rule 34(b) of the Standards of Weights and Measures (Packaged Commodity) Rules, 1977 from the requirement of declaration of MRP and thereby from the application of Section 4A of the Act. According to the Revenue, all the three conditions of "wholesale package" laid down under clause (x) of Rule 2 of the above Rules were to be cumulatively satisfied by the manufacturer so as to claim exemption under Rule 34(b). These three conditions, mentioned in the memo of appeal, are as follows:-
(i) A number of 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;
(ii) A commodity sold to an intermediary in bulk to enable such intermediary to sell, distribute or deliver such commodity to consumer in similar quantities;
(iii) Packages containing ten or more than ten retail packages, provided that the retail packages are labelled as required under the rules.
The learned SDR submits that the appellant has no case that the third condition was not satisfied by the respondent. The appellant's case is that the other two conditions also should be satisfied by the respondent to include the goods in the category of wholesale packages and thereby to claim exemption under Rule 34(b) ibid. On the other hand, the learned consultant for the respondent submits that it was enough for them to satisfy at least one of the conditions for the aforesaid purpose. He has also referred to a clarification issued by the Ministry of Consumer Affairs, Food and Public Distribution (Department of Consumer Affairs). He has produced the relevant letter dated 26.8.2003 issued by the Director, Legal Metrology, Weights and Measures Unit, Department of Consumer Affairs. This letter clarifies as under:-
"The undersigned is directed to refer to your letter No. 900 FL 0383 dated 14.8.2003 and to state that the sub clauses under clause (x) of Rule 2 of the Standards of Weights and Measures (Packaged Commodities) Rules, 1977 relating to the definition of "Wholesale package" are to be read independently and not in conjunction."
The learned consultant has also cited decisions of this Tribunal such as CCE, Chennai vs. Anabond Ltd. 2009 (234) ELT 481 (Tri.-Chennai), CCE, Chennai vs. Caress Beauty Care Products (P) Ltd. 2009 (242) ELT 316 (Tri.-Chennai) and Varnica Herbs vs. CCE, Pondicherry 2008 (221) ELT 417 (Tri.-Chennai).
2. After considering the submissions, the clarification issued by the Legal Metrology Director as also the case law cited by the learned consultant, we have found no merit in this appeal of the Revenue. The clarification of Legal Metrology has a strong bearing on the issue under consideration. Accordingly, the different conditions for "wholesale package" laid down under clause (x) of Rule 2 of the Standards of Weights and Measures (Packaged Commodity) Rules, 1977 have to be independently considered and not in conjunction as claimed by the Revenue. Considering the clarification given in the above manner, we find that the respondent succeeded in showing that the subject goods fell within the ambit of "wholesale package" and thereby made out a case for exemption under Rule 34(b), with the result that their products were to be assessed to duty in terms of Section 4 of the Central Excise Act during the material period. We are told that the respondent paid duty on that basis.
3. In the result, the appeal of the Revenue gets dismissed.