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2008 Supreme(Online)(SC) 231
J U D G M E N T CIVIL APPEAL NO. 2597 OF 2005 WITH CIVIL APPEAL NOS. 325-326 OF 2006 CIVIL APPEAL NO. 2575 OF 2005 CIVIL APPEAL NO. 1029 OF 2007 CIVIL APPEAL NO. 1174 OF 2007 CIVIL APPEAL NOS. 2703-2704 OF 2005 CIVIL APPEAL NOS. 5069-5073 OF 2007
RAJAN NARAIN
The court held that multi-piece packages meeting weight criteria are exempt from certain excise duties, affirming previous decisions that validated commodity sales definitions.
Headnote:(A) Central Excise Act, 1944 - Sections 4 and 4A - Standards of Weights and Measures (Packaged Commodity) Rules, 1977 - Interpretation of Rule 34 regarding commodity valuation and exemptions for multi-piece packages - The assessment of excise duty was questioned based on whether multi-piece packages can be exempted under specific rules, establishing legal principles about retail and unit sale definitions. (Para 11)
(B) Excise Duty - Exemption Clauses - Rule 34 provides exemption if the commodity is sold by weight or measure under certain conditions, which were satisfied here, thus affirming the decision by prior authorities allowing the respondent exemption. (Paras 21 and 24)
Facts of the case:
The appeals arose from questions regarding valuation and classification of packaged hair dye sold in multi-piece packages, examining the legality of excise duty demands against established duties and rules concerning retail price declarations.
Findings of Court:
The court upheld the appeal decisions of lower authorities, agreeing with interpretations of applicable rules that favor commodity sales by weight when under defined thresholds; therefore, duty assessments were reversed.
Issues: Primary issues included the applicability of exemption provisions for multi-piece packages and the determination of lawful excise assessments relevant to packaging classifications.
Ratio Decidendi: The court ruled that multi-piece packaging meeting weight specifications qualifies for exemption under Rule 34, maintaining that interpretations must respect the statutory language as reflective of legislative intent, supported by prior judicial decisions validating such exemptions.
Result: Civil Appeals Nos. 2597, 2575, 2703-2704 of 2005, 325-326 of 2006 were dismissed, while Civil Appeal Nos. 1029, 5069-5073 of 2007 and Civil Appeal No. 1174 of 2007 were allowed with costs.
| Table of Content |
|---|
| 1. interpretation of rules governing excise valuation. (Para 1 , 2 , 3) |
| 2. court's observations on packaging rules applicability. (Para 4 , 5 , 6 , 7 , 15 , 16 , 18 , 20) |
| 3. arguments on multi-piece package definitions. (Para 11 , 12 , 13) |
| 4. conclusion on appeals and cost imposition. (Para 22) |
| 5. final interpretation on exemptions and duty assessments. (Para 24) |
S.B. SINHA, J.
1. Interpretation of Rule 34 of the Standards of Weights and Measures (Packaged Commodity) Rules, 1977 is in question in these appeals which arise out of the judgments and orders dated 10th May, 2004 and 23rd March, 2005 passed in Appeal No.E/293/03-MUM and E/182-183/04-NB(A) by the Customs Excise and Service Tax Appellate Tribunal, Mumbai and Customs Excise and Service Tax Appellate Tribunal, New Delhi respectively.
2. We, however, may notice the factual matrix of the matter from C.A. No.2597 of 2005.
3. Respondent manufactures hair dye. It is packed in pouches each containing 3 gms.. 3 pouches (sachets) are sold in one packet. The net weight of each pouch, as also the net weight of the commodity in 3 pouches and the maximum rate is printed on the pouches.
4. Valuation of exciseable goods for purposes of charging the duty of excise is laid down in Section 4 of the Central Excise Act, 1944 in the following terms:
"4. Valuation of excisable goods for purposes of charging of duty of excise:
(1) Where under this Act, the duty of excise is chargeable on any excisable goods with reference to value, such value shall, subject to the other provisions of this section, be deemed to be -
(a) the normal price thereof, that is to say, the price at which such goods are ordinarily sold by the assessee to a buyer in the course of wholesale trade for delivery at the time and place of removal, where the buyer if not a related person and the price is the sole consideration for the sale."
5. Section 4 A of the Act provides for mode of valuation envisaged under Section 4 . It reads as under :-
"4A. Valuation of excisable goods with reference to retail sale price:
(1) The Central Government may, by notification in the Official Gazette, specify any goods, in relation to which it is required, under the provisions of the Standards of Weights and Measures Act, 1976 or the Rules made thereunder or under any other law for the time being in force, to declare on the package thereof the retail sale price of such goods, to which the provisions of sub- section (2) shall apply.
(2) Where the goods specified under sub-section (1) are excisable goods and are chargeable to duty of excise with reference to value, then, notwithstanding anything contained in section 4, such value shall be deemed to be the retail sale price declared on such goods less such amount of abatement, if any, from such retail sale price as the Central Government may allow by notification in the Official Gazette.
(3) The Central Government may, for the purpose of allowing any abatement under sub-section (2), take into account the amount of duty of excise, sales tax and other taxes, if any, payable on such goods.
(4) If any manufacturer removes from the place of manufacture any excisable goods specified under sub- section (1) without declaring the retail sale price of such goods on the packages, or declares a retail sale price which does not constitute the sole consideration for such sale, or tampers with, obliterates or alters any such declaration made on the packages after removal, such goods shall be liable to confiscation.
Explanation 1: For the purposes of this section, "retail sale price" means the maximum price at which the excisable goods in packaged form may be sold to the ultimate consumer and includes all taxes local or otherwise, freight, transport charges, commission payable to dealers, and all charges towards advertisement, delivery, packing, forwarding and the like, as the case may be, and the price is the sole consideration for such sale.
Explanation 2:
(a) Where on the package of any excisable goods mo
