COMMISSIONER OF CENTRAL EXCISE, VAPI versus M/S. KRAFTECH PRODUCTS INC.

Citation: [2008] 5 S.C.R. 251 · Decided: 14-03-2008 · Supreme Court of India · Bench: S.B. SINHA, V.S. SIRPURKAR · Disposal: Disposed off

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Judgment (excerpt)

[2008] 5 S.C.R. 251 
-I 
COMMISSIONER OF CENTRAL EXCISE, VAPI 
A 
v. 
M/S. KRAFTECH PRODUCTS INC. 
(Civil Appeal No. 2597 of 2005) 
MARCH 14, 2008 
B 
-./ 
(S.B. SINHA AND V.S. SIRPURKAR, JJ.) 
Central Excise Act, 1944; Ss. 4 & 4A/Standard of Weights 
and Measures (Packaged Commodity) Act, 1976/Standard of 
Weights and Measures (Packaged Commodity) Rules, 1977; c 
rr. 2, 6, 12 & 17 and Schedule V appended thereto/Circular 
dated November 2, 1999 issued by CBEC: 
Goods packed in multi piece package -'"- Declaration of 
retail price on package - Requirement of - Levy of excise 
duty in terms of s. 4 or s. 4A of 1944 Act - Applicability of D 
exemption clause under r. 34 of the Rules - Held: Commodity 
--, 
in question being sold in multi piece package displaying 
weight contained therein - Thus, intention of assessee to sell 
the commodity by weight explicit -
Exemption clause 
contained in r. 34 of Rules would apply if the commodity is sold E 
by weight/measure "'- Hence, Appellate authority as also the 
Tribunal were right in holding that assessees were eligible for 
exemption ulr.34 of the Rules, and thus, entitled to assessment 
u/s. 4 of the 1944 Act. 
Sale price on packages - Circular dated November 2, 
F 
1999 issued by CBEC -Applicability of- Held: Not applicable 
- issuance of Circular in terms of opinion of the Law Ministry 
observing that the exemption under r.34(b) of the Rules not 
applicable to multi piece packages is not based on any legal 
principle. 
G 
Respondent-assessee was manufacturer of hair-dye 
and was selling it by packing in pouches of three, each of 
., -+ 
the pouch containing 3 gm. of the commodity in question . 
251 
H 
252 
SUPREME COURT REPORTS 
[2008] 5 S.C.R. 
A Assessee, for the purpose of payment of excise duty, 
made valuation of the comm1:>dity in question in terms of 
s.4 of the Central Excise Act, 1944. Revenue served show-
cause Notices to it demanding differential amount of the 
duty as exemption as claimed in terms of r.34 of the 
B Standards of Weights and Measures (Packaged 
Commodity) Rules, 1977, not available to it. The demand 
was confirmed by the authorities. Appeal preferred by the 
assessee was allowed by the appellate authority. Appeal 
preferred thereaginst by thE! Revenue was dismissed by 
c the Tribunal holding that since the combined weight of 
the 3 units of the impugned goods is less than the 
prescribed weight of 20 gms. the Commissioner (Appeals) 
has rightly concluded in his impugned order that the 
assessees are eligible for exemption under the said Rule 
D 34 and consequently they are entitled to assessment 
under Section 4 of the Central Excise Act, 1944 instead of 
under Section 4A of the said Act. Hence the present 
appeals. 
Revenue contended that the commodity in question. 
E is being sold in 3 sachets, each one of them can be sold 
separately, Rule 34 of the Rules will have no application; . 
that how the product is known in the market, should be 
the test to find out as to how it is sold whether in unit or 
by weight or measure; and that the notices under Section 
F 11A of the Act having beem issued beyond the period of 
six months, the same were barred by limitation. 
Assessees submitted that keeping in view the 
provisions of Rule 12(2) c1f the Standards of Weights and 
Measures (Packaged Commodity) Rules, the commodity 
G can be sold by weight or measure. It was so intended to 
be done as the weight o'f each sachet has been notified 
on the packet; that the dEicision of the Madras High Court 
in the case of Vamica Herbs was rendered per incuriam as 
has been held by a larger Bench of the Tribunal in 
H : Commissioner of Central Excise, Mumbai vs. Uirson 
.._ -
-/ 
.. -+ 
COMMISSIONER OF CENTRAL EXCISE, VAPI v. 
253 
M/S. KRAFTECH PRODUCTS INC. 
Cosmetics Ltd. : 2006 (198) E.LT. 508 (Tri.-LB). 
A 
Dismissing Civil Appeal Nos. 2597, 2575, 2703, 2704 
of 2005; 325 - 326 of 2006 filed by the Revenue and 
allowing Civil Appeal Nos. 1029, 5069-5073 of 2004 and 
Civil Appeal No. 1174 of 2007 filed by the assessees, the 
Court 
B 
HELD: 1.1 It is beyond any doubt or dispute that the 
commodity in question is being sold in 'multi piece 
package'. Identical quantity of commodity is packed in 
each sachet. Yet again admittedly three sachets are c 
packed in one packet. The weight of three sachets is 9 
gms, that is, less than the prescribed weight of 10 gms. 
(Para - 15) [263-C, D] 
1.2 The packet describes the commodity in question. 
It not only discloses

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