NITCO TILES Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) THE appellant M/s. Nitco Tiles have filed this appeal against the impugned order wherein a demand of Central Excise duty of Rs. 1,11,95,715/ - along with interest has been confirmed and also imposed equivalent amount of penalty by holding that since the supplies have been made to institutional/industrial buyers value has to be determined under Section 4 of Central Excise and not under Section 4A of the said Central Excise Act. Aggrieved from the said order, appellant is before us. The brief facts of the case are that the appellant is a manufacturer of ceramic tiles and clearing the same to their depots. The appellant sold this tile to dealer who in turn sells to ultimate consumer. The appellant also sell tiles to buyers such as Real Estate Developers, Construction Co., Cooperative Housing Societies, Commercial Complexes, Educational Institutions & Hostels, Hotels, Hospitals, Interior Designers, etc. The product manufactured by the appellant is ceramic tiles is required to pay duty as per Section 4A of the Central Excise Act, 1944 i.e. MRP less abatement. The appellant is discharging the duty liability as per Section 4A but the Revenue is of the view that as these tiles have been cleared to Industrial or Institutional consumers, they are not required to discharge Central Excise duty as per Section 4A as clearance to these Institutional or Industrial Consumer is exempt to affix MRP as per Rule 2A of the Standards of Weights and Measures (Packaged Commodities) Rules, 1977. Therefore, the appellants are required to pay duty on transaction value i.e. as per Section 4 of Central Excise Act, 1944. Accordingly, impugned proceedings were initiated against the appellant and duty demand along with interest and penalty have been confirmed against them by way of the impugned order which is in challenge before us.

(2.) THE ld. counsel appearing on behalf of the appellant submits that the goods are manufactured by them in regular process and are intended for retail sale and packed accordingly. Although the appellants are receiving orders for bulk supply but the goods supplied in bulk have also been manufactured as those which were intended for retail sale. As per the Standards of Weights and Measures (Packaged Commodities) Rules, 1977, they are required to affix MRP and other details on the said packages, therefore, they are paying duty as per Section 4A of the Central Excise Act, 1944. As per Rule 2A of the Packaged Commodities Rules, the Rules have given exemption for the commodity meant for industrial/institutional consumers. These goods were already manufactured and intended for retail sale, and all packages are treated alike. Therefore, they have correctly discharged their duty and the goods cleared in bulk does not mean that they are meant for industrial/institutional consumers and not required to affix MRP. Only in cases where packages are marked "Marked for use by industrial/institutional consumers, duty is discharged on transaction value. But it is not the case here. He further submits that a similar situation came up in the case of H&R Johnson (India) Ltd. vide Order Nos. A/330 -332/14/EB/C -II, dated 2 -5 -2014 [ : 2014 (306) E.L.T. 645 (Tribunal)], this Tribunal held that the assessee has rightly discharged the duty as per Section 4A of the Central Excise Act, 1944. Therefore, he submits that they have correctly discharged the duty liability and impugned order is required to be set aside.

(3.) HEARD both sides. Considered the submissions.