Miraj Products Pvt. Ltd. Vs. C.C.E. - Court Judgment

Excerpt:
1. heard both sides. the applicant filed this application for waiver of pre-deposit of duty of rs. 2,56,08,825/- and penalty of rs. 25,00,000/-.2. brief facts of the case are that the appellants are engaged in the manufacture of chewing tobacco. the applicants manufacturing chewing tobacco into pouches i.e. pouch containing 6 grams of chewing tobacco and zipper pouch containing 15 grams. there is no dispute in respect of the tobacco contained in 15 grams pouch. in the present case the dispute is in respect of small pouches containing 6 grams of chewing tobacco. the (sic) of the revenue that these were assessable to duty under section 4a of central excise act whereas the appellant is paying duty under section 4 of central excise act. the adjudicating authority held that as these small.....

Judgment:
1. Heard both sides. The applicant filed this application for waiver of pre-deposit of duty of Rs. 2,56,08,825/- and penalty of Rs. 25,00,000/-.

2. Brief facts of the case are that the appellants are engaged in the manufacture of Chewing Tobacco. The applicants manufacturing chewing tobacco into pouches i.e. pouch containing 6 grams of chewing tobacco and zipper pouch containing 15 grams. There is no dispute in respect of the tobacco contained in 15 grams pouch. In the present case the dispute is in respect of small pouches containing 6 grams of chewing tobacco. The (SIC) of the revenue that these were assessable to duty under Section 4A of Central Excise Act whereas the appellant is paying duty under Section 4 of Central Excise Act. The adjudicating authority held that as these small pouches are packed in group which is having 33 small pouches and one zipper pouch containing 15 grams of tobacco, this group package is having the maximum unit price. The adjudicating authority of the view that this group package is intended for retail sale, therefore, the maximum unit price on the package is treated as maximum retail price and assessable to duty under Section 4A of Central Excise Act.

3. The contention of the applicant is that the group package is not intended for retail sale. The contention is that as per the provisions of Section 4A of Central Excise Act, any notified goods in relation to which it is required under the provisions of Standards of Weights & Measures Act, 1977 or the rules made thereunder or in other law or time being enforce to declare on package thereof, the retail sale price of such goods to which the provisions of Sub-section 2 shall apply. The contention is that the appellant wrote to the competent authority under the Standards of Weights & Measures Act for their liability to affix the maximum retail price on the pouches in which 6 grams of chewing tobacco is packed vide letter dt.4.4.03 and the authority vide letter dt. 10.4.03 replied that in case the net weight or measures of the commodities is twenty grams or twenty milliliters or less. There is no requirement of mentioning MRP. The contention is that as the authority under the standards of Weights & Measures Act clarified that there is no need to mention the MRP of small pouches containing 6 grams of showing tobacco, therefore, the revenue cannot ask for assessment under Section 1A of Central Excise Act. The contention is also that the Central Board vide circular dt 20.8.02 had clarified that in case of any doubt, the clarification may be obtained from the concerned department. In view of the classification given by the concerned department the applicants are not under any obligation to mention MRP on the small pouches. Therefore, demand is not sustainable.

4. The contention is also that the adjudicating authority held that the group packages intended for retail sale, therefore, maximum unit wise written on the group pkg is to be taken as MRP therefore the group package is liable to assess under Section 4A & Central Excise Act. The applicants before adjudicating authority is taken a specific stand that this group package is that for retail sale and in absence of any evidence contrary to this the finding is not sustainable.

5. The contention of the revenue is that as per the provision of Weight & Measure Act 33 small packs and the 15 gram pack is a group package.

The contention of revenue is that it will not help the applicants that this group package is never sold in retail. The contention is that as this pouch is the Packages Commodity Rules exempts for affixing MRP on 20 grams or 20 ml. In respect of group packages, the contention of Revenue is that group packages is intended for retail price but there is no evidence on record to show this fact.

7. The applicants also pointed out that the Commissioner of Central Excise in the case of other manufacturer i.e. Gupta Tobacco Co. vide order dt.20.10.05 held that the packages containing less than 10 grams of chewing tobacco are assessable to duty under Section 4 of Central Excise Act.

8. Keeping in view the facts and circumstances of the case as the pouch which is intended for retail sales is having less than 20 grams of chewing tobacco, we find that the applicant had a strong case in their favour, therefore, pre-deposit of whole of the duty and penalty is waived. Stay petition is allowed.