2007 (9) TMI 246 - AT - Central Excise

Valuation - 50 ml bottles meant for free distribution to farmers along with seeds MRP price not declared on the bottles of 50 ml. - unless there is an element of sale as contemplated in section 2(v) Rule 6(1)(f) will not be attracted and thus such package would not be governed under the provisions of SWM (PC) Rules which would clearly take such package out of the restricted arena of section 4A(1) and would put it in the broader arena of section 4

Summary

Issues:
Assessment under Section 4A of the Central Excise Act, 1944 for goods without declared MRP; Applicability of Board's Circulars on MRP printing and exemptions under Rule 34; Consistency in assessment based on MRP declaration; Interpretation of retail sale price and its relevance to MRP printing.

Analysis:
1. The case involved the assessment of manufacturers of pesticides and insecticides under Section 4A for goods without declared MRP. The respondents argued that certain 50 ml bottles were meant for free distribution and not for retail sale, hence not governed by the Standards of Weights and Measures Act, 1976. Despite the lower authorities' demand, the Commissioner (Appeals) set it aside based on a Tribunal order in the respondent's favor, leading to the Revenue's appeal.

2. The appellants contended that Section 4A applies when MRP printing is legally required, citing Board's Circulars. They argued that exemptions under Rule 34 do not apply to goods not meant for industrial use or personal consumption, as clarified in Circulars. CESTAT's consistent view from past cases supported assessing goods based on declared MRP under Section 4A(2), subject to Rule 34 exceptions.

3. The respondents relied on a Tribunal decision in their favor, emphasizing consistency in treatment based on similar facts. They referenced an Apex Court decision involving Nestle India Limited to support their stance that goods not meant for sale are not governed by MRP-related rules, hence not liable under Section 4A.

4. The Tribunal noted that on similar facts, it had previously ruled in the appellants' favor, aligning with the Supreme Court's decision in Nestle India Limited's case. The Supreme Court's interpretation emphasized the necessity of a sale for MRP-related rules to apply, distinguishing between Sections 4A and 4 based on the presence of a sale element.

5. Considering past decisions and the Supreme Court's interpretation, the Tribunal found no merit in the Revenue's appeal and dismissed it accordingly, upholding the assessment under Section 4 instead of Section 4A based on the absence of a sale element as per the SWM Act's definition of retail sale price.

*(Pronounced in the court)*