Decided on August 05,2015

Sterling Tools Ltd. Appellant
Commissioner Of C. Ex. And S.T., Faridabad Respondents


ASHOK JINDAL, J. - (1.)The appellants are a manufacturer of fasteners i.e. nuts, bolts and screws for automobile. Shri Atul Aggarwal is Director of appellant company. The goods manufactured by the appellant are chargeable to Central Excise duty under Notification No. , dated 29 -5 -2006 as amended. The automobile component and accessories falling under any chapter of Central Excise Tariff are to be charged duty on assessable value determined under Sec. 4A of the Central Excise Act, 1944. The period of dispute in this case is 1 -6 -2006 to 31 -12 -2008 and from 1 -1 -2009 to 31 -9 -2010. During the impugned period, the appellant company was clearing automobile parts in the following manner:
(a) Automobile manufacturers as original equipment parts in loose condition on which duty was being paid on transaction value under Sec. 4 of the Central Excise Act, 1944.

(b) Spare parts division of automobile manufacturers in packings containing 1 to 10 pieces and on which as per the instruction of manufacturers labels mentioning the MRP and other particulars like manufacturer name, part No., etc., were being affixed and duty on the same has been paid on the value determined under Sec. 4A of the Act; and

(c) To wholesale dealers of goods were being sold in boxes of 100 pieces each and on which duty was paid on transaction value of the Sec. 4 of the Central Excise Act, 1944.

(2.)There is no dispute about the clearance made under categories (a) and (b) herein above. The only dispute with regard to the goods sold to the wholesale dealer in boxes of 100 pieces each on which duty was paid and transaction value as per Sec. 4 of the Act. Therefore, the show cause notices were issued to the appellant by invoking extended period of limitation for the period 1 -6 -2006 to 31 -12 -2008 on 7 -5 -2010 and for the period Jan., 2009 to October, 2010 on 7 -1 -2011 to demand duty on the clearances made to the wholesale dealer to whom the goods were being sold in boxes of 100 pieces each, as per the value to be determined under Sec. 4A of the Act. The show cause notices were adjudicated. Demand of duty was confirmed along with interest and penalties on both the appellants were imposed. Aggrieved from the said order, the appellants are before us.
(3.)Shri V. Lakshmi Kumaran, advocate, ld. counsel for the appellants appeared and submits that in this case the adjudicating authority proceeds with the finding that the appellant are clearing their goods as multi piece packaging which is beyond the show cause notices as there is no allegation as such in the show cause notice. He submits that the packing in which the appellant is clearing the goods are wholesale packing and no MRP is required to be declared and the valuation is to be done as per Sec. 4 of the Act. He further submits that the Rules governing multi piece packing were omitted from the statute book w.e.f. 13 -1 -2007 vide Notification No. G.S.R./425(E), dated 17 -7 -2006. Therefore, the demand post -12 -1 -2007 is not sustainable. He further submits that for the period up to 12 -1 -2007 the demand is also not sustainable as there was no saving clause in the Rules and it is settled law that proceedings cannot be initiated under a rule, after it has ceased to exist. To support his contention he relied on the decision of the Apex Court in the case of Rayala Corporation Pvt. Ltd. v/s. Director of Enforcement, New Delhi reported in : 1969 (2) SCC 412 and Kolhapur Cane Sugar Works Ltd. v/s. UOI -, 2000 (119) E.L.T. 257 (S.C.).

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