TITAN INDUSTRIES Vs. COMMISSIONER OF CUS.

JUDGEMENT

(1.) IN the impugned order, Id. Commissioner demanded additional customs duty of over Rs. 3.75 crores on 'Button cells' (input for wrist watches) imported by the appellants and covered by 62 Bills of Entry, by assessing the goods under Section 4A of the Central Excise Act. He also imposed equal amount of penalty on the importer.

(2.) AFTER examining the records and considering the submissions made by both sides, we find that: the above goods do not figure in the relevant Schedule to the Rules framed under the Standards of Weights and Measures Act, 1976. Section 1(3) of the said Act provides that the provisions of the Act shall come into force on such date as the Central Government may, by notification, appoint, and different dates may be appointed for different classes of goods. Rules framed under the Act classified the goods. Ld. Counsel for the appellants has shown us Schedule IN to the Rules, which is a list of 20 items, to which Rule 5 of the Rules would apply. This Rule 5 is the provision which has a nexus with Section 1(3) of the Act. The above Schedule to the Rules does not contain any mention of 'Button cells'. It further appears to us that CBEC's Circular No. 625/16/2002 -CX., dated 28 -2 -2002 clarified that, where there was no statutory requirement under the Weights and Measures Act to declare the retail sale price on the packages, Section 4A of the Central Excise Act would not apply. What is contained in para 6 of the Board's Circular is still more pertinent and the same reads as under : It is, therefore, clarified that, in respect of all goods (whether notified under Section 4A or not) which are not statutorily required to print/declare the retail sale price on the packages under the provisions of the Standards of Weight and Measures Act, 1976, or the rules made thereunder or any other law for the time being in force, valuation will be done under Section 4 of the C.E. Act, 1944 or under Section 3(2) of the Centraf Excise Act, 1944, if tariff values have been fixed for the commodity. Thus, there could be instances where the same notified commodity would be partly assessed on the basis of MRP under Section 4A and partly on the basis of normal price (prior to 1 -7 -2000) or transaction value (from 1 -7 -2000) under Section 4 of the C.E. Act, 1944. It thus appears that, where any goods was not specifically mentioned in Schedule III to the Weights and Measures Rules, 1977, it was not open to the Department to undertake valuation of such goods for payment of Central excise duty under Section 4A of the Central Excise Act, whether or not such goods were notified under this provision of the Central Excise Act. This clarification of the Board, which is abundantly clear on the point is binding on the Departmental authorities including the Commissioner who passed the impugned order. Unfortunately, Id. Commissioner did not consider the above Circular to be binding on him. We are Unable to countenance this stand of the adjudicating authority. Ld. SDR has heavily relied on the Notification issued under Section 4A ibid Notification No. 5/2001 -CE. (N.T.), dated 1 -3 -2001, wherein item No. 64 is "Primary cells and Primary batteries". This Notification specified 83 items, whereas the relevant Schedule to the Weights and Measures Rules mentioned only 20 items. Ld. SDR has claimed that the above Notification was issued only on the basis of the relevant Schedule to the Weights and Measures Rules, which prevailed at the material time. However, she has not produced any copy of such schedule mentioning the goods in question. In the circumstances, prima facie, we have got to go by the view taken by the CBEC in the aforesaid Circular, which is apparently in tune with the provisions of Section 4A of the Central Excise Act read with the relevant provisions of the Weights and Measures Act. Thus, on merits, the appellants have prima facie case against the assessment done under Section 4A of the Central Excise Act in respect of 'Button cells'. They also seem to have a good case on limitation in respect of the demand raised on goods covered by all but one Bill of Entry. Out of the 62 Bills of Entry, only one B/E was filed on a date proximate to the date of issue of show -cause notice. AH other Bills of Entry were filed between March, 2001 and December, 2002. Show cause notice was issued on 5 -12 -2003, after more than one year. Ld. Counsel has referred to some of the documents available on record in his endeavour to show that the Department was aware of the relevant facts as early as on 27 -3 -01. We have seen a letter dated 15 -6 -01 written to the appellants by their CHA, wherein a decision of the Commissioner of Customs, Chennai on the same issue as the one under consideration now was communicated. The Customs Commissioner's decision was to the effect that CVD should be levied on Battery cell only on the basis of normal valuation. It would appear that, as early as in June 2001, the acceptance of normal valuation of Battery cells by the Commissioner of Customs was within the knowledge of the respondent in the present appeal. If that be the case, there can be no suppression of facts by the appellants, at least, from June, 2001 and the larger period of limitation was not liable to be invoked against them. The contentious arguments raised by ld. SDR will be considered at the time of final hearing stage, provided the same are substantiated by production of the relevant Schedule to the Weights and Measures Rules.

(3.) IN the result, there will be waiver of pre -deposit and stay of recovery in respect of the duty and penalty amounts.