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2017 (1) TMI 970 - AT - Central ExciseValuation - Transaction value u/s 4 or MRP based value u/s 4A of Central Excise Act, 1944 - retail pouches containing tobacco weighing 6 gms. and 7 gms. each - The said pouches are then packed in a polythene pack. The polythene pack contained 52/ 42/40/32 pouches - when these chewing tobacco pouches containing less than 10 gms. of net weight were put together (12 to 52 numbers) in the polythene bag whether to consider such polythene bag as a multi piece pack or a wholesale pack? Held that: - there are two legal requirements for a commodity to be taxed under MRP based assessment the first one is requirements under SWM Act and rules made thereunder and the second one is notification under Section 4A of the Central Excise Act, 1944. While the retail pouch may be sold in number, the sale is with reference to the weight of tobacco contained in the said pouch. As an analogy we can mention that toothpaste in tubes and talcum powder in packs are sold in numbers. But the reference is to the weight contained, either of toothpaste or powder inside the pack. The price is directly influenced by the weight of the content. The buyer and the seller is fully aware that the product is sold by its quantum though for convenience it is put in unit packages. Hence, it is clear that product like chewing tobacco is sold always with reference to the weight contained in the pouch though the pouch as a unit is sold. Accordingly, we are in agreement with the conclusion reached by the lower authority in the impugned order on this count. In Loknath Prasad Gupta [2006 (8) TMI 58 - CESTAT, KOLKATA], the Tribunal held that 25 pouches of Khaini each containing 5 gms./9 gms. packed in polythene packs without MRP in such package is not governed by valuation under Section 4A. This order of the Tribunal has been affirmed by the Hon’ble Supreme Court in Commissioner of Central Excise, Rajkot Versus M/s Makson Confectionery Pvt. Ltd. [2010 (9) TMI 10 - SUPREME COURT]. Board Circular dated 28/02/2002 which clarified the scope of application of provision of Section 4A. It was noted that SWM Act, 1976 and Rules made thereunder are administered by the State Governments. In case of doubt a clarification may be obtained from the concerned Department of the State Government. In the present case, we note that for a situation covered by same set of facts, clarification was sought by the industry from the Legal Metrology Department. In response to letter dated 28/07/2003 of All India Tobacco Manufacturers Association, the Director of Legal Metrology, Department of Consumer Affairs, Government of India vide his letter dated 22/08/2003 clarified the legal position to the effect that all packages below 10 gms. are totally exempt from the purview of rules - Further, in accordance with Rule 2 (x) and Rule 29 the package containing 10 or more retail packages, common wholesale package, need not carry retail sale price declaration thereon. The impugned goods cannot be subjected to as MRP based assessment under Section 4A - appeal dismissed - decided against Revenue.
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