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2017 (6) TMI 760 - AT - Central ExciseValuation - RSP valuation - whether the Talcum Powder in 25 gram packages cleared by the appellants which are meant for free distribution along with Santoor Bathing Bars are liable to be assessed under Section 4 or 4A of the CEA, 1944? - Held that - the goods are supplied though not intended for retail sale - Rule 3 of Standards of Weights and Measures (Packaged Commodities) Rules, 1977 states that the rules do not apply to goods not intended for retail sale - Since the talcum powder packages / sachets supplied by the appellants were not intended for retail sale, the valuation has to be made under Section 4 and not under Section 4A - reliance placed in the case of GS. ENTERPRISES Versus COMMISSIONER OF CENTRAL EXCISE, JAIPUR 2004 (4) TMI 191 - CESTAT, NEW DELHI - the valuation adopted by the appellants is legal and proper and the demand is unsustainable - appeal allowed - decided in favor of appellant.
Issues:
Assessment under Section 4 or 4A of the Central Excise Act, 1944 for Talcum Powder in 25 gram packages meant for free distribution along with Santoor Bathing Bars. Analysis: The case involved a dispute regarding the assessment of Talcum Powder in 25 gram packages cleared by the appellants for free distribution along with Santoor Bathing Bars under Section 4 or 4A of the Central Excise Act, 1944. The appellants, manufacturers of Talcum Powder, cleared the goods without affixing MRP but with specific labeling indicating they were not for retail sale. The department contended that as specified goods, the provisions of the Standards of Weights and Measures (Packaged Commodities) Rules, 1977 would apply, necessitating assessment under Section 4A. Show cause notices were issued proposing differential duty, interest, and penalties. The original authority confirmed the duty demand and penalties, which were partially upheld by the Commissioner (Appeals), leading to the appeal before the Tribunal. The appellant argued that the goods were bulk-supplied to another entity, not intended for retail sale, as clearly mentioned on the packages. They contended that valuation should be under Section 4, citing a Tribunal decision affirmed by the Supreme Court. Conversely, the respondent contended that as specified goods, assessment under Section 4A was warranted due to the application of Standards of Weights and Measures Act/Rules. The Tribunal considered the arguments and relevant precedents, including a CBEC Circular indicating that goods supplied free with another item as a marketing strategy may not require MRP printing, thus falling under Section 4A. They noted that the goods were not intended for retail sale, aligning with Rule 3 of the Packaged Commodities Rules. Citing a previous case, the Tribunal emphasized that Section 4A applies only when there is a statutory obligation to print MRP. Therefore, they concluded that the appellants' valuation method was correct, rendering the demand unsustainable. Consequently, the impugned order was set aside, and the appeal was allowed with any consequential relief. In the final analysis, the Tribunal's decision favored the appellants, ruling that the Talcum Powder cleared for free distribution alongside Santoor Bathing Bars was correctly assessed under Section 4, not Section 4A, of the Central Excise Act, 1944. The judgment highlighted the importance of the intended retail sale status of goods and the absence of statutory requirements for MRP printing in determining the appropriate valuation method.
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