By TIOL News Service

MUMBAI, JAN 20, 2015: THE appellant manufactures "Glues and adhesives" falling under Chapter 35 of the CETA, 1985. The said commodity is notified u/s 4A of the CEA, 1944.

Both lower authorities have confirmed the demand raised on the appellant on the ground that they have wrongly adopted MRP based assessment under the provisions of Section 4A of CEA, 1944 inasmuch as the packing of the products indicated that they were supplied to “industrial consumers” and hence they were not covered by the provisions of Standards of Weight and Measurement Act, 1976.

The factual finding of the first appellate authority is as under:-

"As per Section 4A(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 & Measurement Act, 1976 (60 of 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. As per Rule 34 of the Standards of Weight & Measurement Act, 1977 the provisions of marking MRP are not applicable to products especially packed for exclusive use in the industry as a raw material or for servicing of any industry provided that the exemption shall not be available in respect of any package containing commodity of net content of 5Kg or 5 Litres or less and displayed for sale at retail outlet. In the present case, it is a fact that glues and adhesives are cleared to industrial consumers and the appellants have not demonstrated that any dealer have sold the material to the retailers. The appellants are marking the packages as “Industrial use”. Therefore, their products are assessable to payment of duty under Sec. 4 i.e. "transaction value". The appellants contention that Rule 34 is an exemption and they were not eligible for this exemption because they had not satisfied the major condition of such rule (1)(a) of Rule 34 viz. the marking on the package unambiguously indicates that it has been specially packed for the exclusive use of any industry as a raw material or for the purpose of serving any industry mine or quarry is not factually correct. I find that appellants have printed the words “for industrial use” and fulfil the condition of Rule 34. The appellants stand taken that exemption under Rule 34 is not mandatory is not acceptable. The duty liability and interest recovery is therefore confirmed."

The appellant filed an application requesting that the case be decided on merits.

The Bench heard the AR and after recording the finding of the Commissioner(A) observed -

"5. As against such factual finding, the appellant in the grounds of appeal have not controverted the fact that they were selling the goods to industrial consumers, and also whether they have affixed MRP or not. In the absence of any evidence, we find that the first appellate authority has correctly upheld the demands raised and confirmed against the appellant."

The appeal was rejected.

(See 2015-TIOL-149-CESTAT-MUM)