Per Mr. VASA SESHAGIRI RAO

The present appeal is directed against Order-in-Original No. 26/2023 (Commr) dated 31.05.2023 whereby the learned Commissioner has disallowed valuation adopted under Section 4 of the Central Excise Act, 1944 in respect of certain tyres, tubes and flaps cleared to the replacement market and has held that such goods are liable to valuation under Section 4A of the Central Excise Act, 1944. The learned Commissioner has consequently confirmed a demand of differential duty amounting to ₹221,31,60,075/- for the period 01.03.2012 to 30.06.2017 along with interest under Section 11AA and penalty under Section 11AC read with Rule 25 of the Central Excise Rules, 2002.

1.2 The Appellant is a manufacturer of tyres, tubes and flaps falling under Chapter 40 of the Central Excise Tariff Act, 1985 and was operating multiple manufacturing units across the country. It is not in dispute that certain categories of high-end tyres, which were fully wrapped and bore MRP stickers, were assessed under Section 4A. The present dispute concerns tyres, tubes and flaps that were inserted together and secured with two or three plastic carry straps, allegedly for safety during transportation.

1.3 The Department formed a view that such strapped tyres, tubes and flaps constitute “pre-packaged commodities” within the meaning of Section 2(l) of the Legal Metrology Act, 2009 read with the Legal Metrology (Packaged Commodities) Rules, 2011 and that, therefore, the goods were liable to assessment under Section 4A read with Notification No. 49/2008-CE (NT). Investigation culminated in issuance of Show Cause Notice dated 06.04.2019 invoking extended period under Section 11A(4)and proposing revaluation under Section 4A.

1.4 The Commissioner confirmed the demand holding that the impugned goods satisfy the conditions laid down by the Hon’ble Supreme Court in Jayanti Food Processing (P) Ltd. v. CCE, 2007 (215) ELT 327 (SC) and Whirlpool India Ltd. v. Union of India, 2007 (218) ELT 167 (SC), and further held that extended period is invocable on account of suppression.

2. Aggrieved, the Appellant has filed the present appeal.

3. The Learned Advocate, Shri Karthik Sundaram, appeared on behalf of the Appellant and Shri Subramanian, the Special Counsel appeared for the Revenue.

4. The Learned Advocate for the Appellant submitted that: -

4.1 The entire foundation of the impugned order is legally flawed. It was argued that Section 4A applies only when goods are sold in packaged form and when there is a statutory requirement under the Legal Metrology Act or any other law to declare the retail sale price on such package. The strapped tyres, tubes and flaps are not “packages” and do not fall within the definition of “pre-packaged commodity”under Section 2(l) of the Legal Metrology Act, 2009.

4.2 Mere strapping at two or three points, covering hardly 1.4% to 3.3% of surface area, cannot amount to packaging. The goods remain fully visible, unwrapped and unsealed. Reliance is placed on Clarifications dated 01.05.1991 and 16.11.1992 issued by the Ministry of Food & Civil Supplies under the Standards of Weights and Measures Act, 1976, which specifically clarified that tyres tied with polythene strips do not constitute “pre-packaged commodities”.

4.3 These clarifications continue to hold the field under Section 57 of the Legal Metrology Act and Rule 34 of the Packaged Commodities Rules. The Commissioner erred in disregarding binding clarifications without jurisdiction.

4.4 Strong reliance was placed upon the recent decision of this Tribunal in M/s. Apollo Tyres Ltd. v. Commissioner of GST & Central Excise, Chennai, 2025 (10) TMI 1128 (CESTAT Chennai), wherein identical facts involving strapped tyres were held not assessable under Section 4A. It is contended that judicial discipline mandates following the said decision.

4.5 On limitation, it was submitted that the industry practice was known to the Department, correspondences were exchanged, and no suppressio