In Excise Appeal No.1234 of 2011- CESTAT - As per Rule 34 of the Standards of Weights and Measures (Packaged Commodities) Rules, 1977, there is no requirement to declare MRP on goods weighing less than 10gm; Section 4A of Central Excise Act not applicable: CESTAT (Ahmedabad)
Members Ramesh Nair (Judicial) & C.L. Mahar (Technical) [03-05-2023]

Read Order: Makson Pharmaceuticals (I) Pvt Ltd v. C.C.E. & S.T.-Bhavnagar

LE Correspondent

Mumbai, May 24, 2023: The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal has held that Rule 34(b) of the Standards of Weights and Measures (Packaged Commodities) Rules, 1977 (SWM Rules) exempts goods weighing less than 10 grams from the requirement of affixing or printing the retail sale price on their packaging and has clarified that section 4A of Central Excise Act,1944, does not apply in such cases.

Briefly stated facts of the case were that Makson Pharmaceuticals (assessee) was engaged in the manufacturing and selling of confectionaries of various brand names such as M/s. Nestle India Ltd and others. The case of the department was that the valuation of confectionary should be taken on the basis of wholesale packs like poly bags and jars, whereas, the claim of the assessee was that in terms of Rule 34 of the SWM Rules, since the weight of the individual confectionary was less than 10 gm, there was no requirement under the law to declare MRP on individual sugar confectionary and consequently, in respect of the individual confectionary the provision of section 4A for the purpose of Central excise valuation, shall not apply.

The two-member bench of Ramesh Nair (Judicial) and C.L. Mahar (Technical) dismissed the revenue’s appeal, stating that the law laid down by the Supreme Court in the appellant’s own case in Commr. of C. Ex., Rajkot, Gujrat v. Makson Confectionery Pvt. Ltd. [LQ/SC/2010/972], shall continue to be applicable in the present case also. The bench noted that the previous decision of the Supreme Court has emphasized that individual confectionery items should be considered for assessment, rather than the wholesale pack.

As regard the assessee’s appeal, the bench noted that provision of section 11D of the Central Excise Act, apply only in cases where the assessee collects the duty and does not deposit to the government.

In the present case, though the appellant had shown the duty in the invoice but at the same time by issuance of the credit note to the customer, the said amount has not been collected. Moreover, the duty was paid under protest and thereafter credit note was issued. The bench observed that with this fact, it cannot be said that the assessee had collected any duty and the same was not deposited to the government exchequer. Consequently, the bench held that there was no application of section 11D in the facts of the present case therefore, the demand confirmed under section 11D cannot be sustained.