2007 (8) TMI 317 - AT - Central Excise

Bought out items - clearance of Johnson baby soap of Johnson on which no MRP was affixed and which was sold as free gift along with sale of main product - declaration of MRP will apply only to packages intended for retail - In as much as the goods were not meant for retail sale but as free supply item there was not statutory requirement for declaring the MRP - held that such free supplied items which do not carry any printed MRP are not liable to be assessed under Section 4(A)

Summary

Issues:
Assessment of duty on goods without MRP under Central Excise Act, 1944.

Analysis:
The case involved a dispute regarding the assessment of duty on Johnson baby soap without a printed Maximum Retail Price (MRP) sold as a free gift along with another product. The appellant argued that the duty should be assessed under the normal price in terms of Section 4 of the Central Excise Act, while the Revenue contended that it should be assessed under Section 4A. The Commissioner (Appeals) examined the relevant provisions and circulars, concluding that goods not meant for retail sale and supplied free are not subject to Section 4A. The Commissioner also referred to the Standards of Weight and Measurement Act, 1976, emphasizing that the absence of MRP on goods not intended for retail sale exempts them from Section 4A valuation.

The appellate authority found that the soap in question was supplied free of cost and not meant for retail sale, thus Section 4A was deemed inapplicable. The authority also considered a previous Tribunal decision in a similar case, where it was held that items without printed MRP supplied free are not liable for assessment under Section 4A. Moreover, the authority distinguished a judgment relied upon by the Revenue, emphasizing the absence of MRP and the specific indication that the goods were not for retail sale. The authority further cited other Tribunal decisions, such as Rallis India Ltd. v. CCE Nagpur and CCE, Ahmedabad v. ACME Healthcare, reinforcing that goods distributed free without MRP are to be assessed under Section 4, not Section 4A.

In light of the consistent Tribunal decisions and the legal interpretations provided, the appellate tribunal upheld the Commissioner (Appeals)'s decision, rejecting the Revenue's appeal. The judgment reaffirmed that goods distributed as free supplies without a printed MRP are correctly assessed under Section 4 of the Central Excise Act, in line with the Standards of Weight and Measurement Act, 1976, and relevant circulars.