2006 (3) TMI 31 - AT - Central Excise

Summary

Issues involved: Interpretation of Section 4A of the Central Excise Act, 1944 for valuation of goods (Lipsticks and Nail Polishes) and applicability of Standards of Weights and Measures (Packaged Commodities) Rules, 1977.

Interpretation of Section 4A of the Central Excise Act, 1944:
The Appellate Tribunal CESTAT, Mumbai heard an appeal by the Commissioner challenging the lower appellate authority's decision regarding the valuation of Lipsticks and Nail Polishes under Section 4A of the Central Excise Act, 1944 based on MRP. The goods were found to be transported in larger boxes containing smaller boxes, not intended for retail sale, with individual pieces of lipsticks and nail polishes in specific quantities.

Applicability of Standards of Weights and Measures (Packaged Commodities) Rules, 1977:
The definition of "multi piece package" from the SWMR was highlighted, emphasizing packages containing multiple individually packaged pieces intended for retail sale. The respondents argued that the smaller boxes were for transportation purposes only, with only individual packs sold at retail, not the larger boxes. Rule 34 of SWMR exempts packages with net weights less than 10 gm or 10 ml from certain provisions, and a Larger Bench decision of the Tribunal clarified that cosmetics should be sold by weight or measure, not by numbers, thus remaining outside the SWMR purview and assessed under Section 4 of the Central Excise Act, 1944.

Decision:
The Tribunal found the Larger Bench's decision applicable to the case, concluding that the goods in question fell outside the scope of Section 4A and should be assessed under Section 4 of the Central Excise Act, 1944. Therefore, the department's appeal was rejected, affirming the lower appellate authority's order.