Case Law Details
Commissioner of Central Excise & Service Tax Vs A.R. Polymers Pvt. Ltd. Etc (Supreme Court of India)
Whether sale to an institutional customer for onward sale to consumer qualifies for exemption u/s 4(A) of Central Excise Act,1944?
The apex court here was dealing with a case where footwear was being supplied under a contract to paramilitary forces for being supplied onward to the employees of such forces and MRP stickers were being affixed on the footwear only to project the sale as retail sale(which condition was mandatory to avail the benefit of exemption). The Ld Judges relying upon the case of Jayanti Food Processing Pvt. Ltd. v. Commissioner of Central Excise, Rajasthan(2007) 8 SCC 34(SC) held that the fixation of the MRP must have been mandated by law and in the present case the institutional sale to paramilitary forces being exempted from such fixation under the legal Metrology (Packaged Commodities) Rules,2011, the voluntary fixing of the MRP could not make the respondent eligible to get the exemption on institutional sales and thus allowed the SLP of the department.
For a sale of goods to take assessment benefits under Section 4(A) of the Act, it must be a retail sale, and there must be a mandate of law that directs the seller to affix a retail price on the goods for a sale to be considered a retail sale.
A consumer, as clarified by the Jayanti Foods Judgment, is the final consumer of the product, and not the intermediary. In the present case at hand however, the purchaser institutions, as discussed above are intermediaries, who after the purchase of the said goods, distribute it further to the final consumer.
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