2004 (1) TMI 438 - AT - Central Excise

Summary

Issues: Valuation of promotional pack containing diapers and Pears soap.

In this case, the appellants, who are manufacturers of diapers, declared a lower price for a "promotional pack" containing diapers of different sizes along with a free 'Pears Soap' offer. The duty was paid based on the reduced prices declared for this promotional pack. However, the valuation of this promotional pack is challenged, questioning the reduced prices declared compared to the prices of corresponding packs. The main issue revolves around whether the sale of the 'Pears soap' to the wholesale buyer is compulsory or not. If compulsory, the Section 4(1)(a) price is not applicable, and valuation rules under Section 4(1)(b) need to be used for comparable goods. If not compulsory, Rule 5 regarding the monetary value of additional consideration should be applied, and the amounts re-determined. The existing PL approvals are deemed inadequate and cannot be upheld.

The Tribunal found that the nature of the sale of 'Pears soap' is crucial in determining the correct valuation of the promotional pack. Therefore, the order is set aside, and valuation needs to be re-determined based on this crucial factor. During the re-adjudication process, the authority is directed to consider the case law cited by the appellants and any other submissions made by the parties. The appeal is allowed as remand, emphasizing the need for a comprehensive re-evaluation of the valuation of the promotional pack in light of the compulsory or non-compulsory nature of the sale of 'Pears soap' to wholesale buyers.