MRP valuation for combination packs governs where dissimilar goods are sold together and undervaluation is not proved.

Goods cleared as a combination pack of dissimilar commodities were held assessable under Section 4A on the declared combined retail sale price, because the packaged commodity rules treat such a pack as a single combination package and the Board's circular supported MRP-based valuation for multi-piece or combined packs. The Tribunal found that where one item is supplied free or not separately priced, the declared package MRP may be adopted unless revenue establishes a sustainable basis to reject it. Isolated dealer statements and retail deviations were insufficient to displace the declared valuation absent affirmative evidence of undervaluation or additional consideration. The demand, interest and penalty were therefore not sustainable.

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Issues: Whether goods cleared under a combination scheme containing dissimilar commodities could be assessed on the combined maximum retail price declared on the package, and whether the demand, interest and penalty raised on the basis of individual maximum retail prices were sustainable.

Analysis: Section 4A of the Central Excise Act, 1944 governs valuation of specified excisable goods with reference to retail sale price, while Rule 2 of the Standards of Weights and Measures (Packaged Commodities) Rules, 1977 recognises a combination package as one containing two or more individual packages or pieces of dissimilar commodities. The Board's Circular No. 673/64/2002-CX. clarified the approach for multi-piece packs and the same principle was applied to combination packs where one item is supplied free or is not separately priced. The record showed that the appellants cleared the goods as a combination pack with one product marked as not for retail sale, and the Tribunal held that the scheme was covered by the circular and by prior decisions permitting MRP-based valuation on the package as a whole. The statement of a dealer did not justify discarding the declared valuation, since isolated retail deviations by dealers could not be attributed to the manufacturer in the absence of affirmative evidence of undervaluation or additional consideration.

Conclusion: The combination scheme was held to be assessable on the declared combined MRP, and the demand, interest and penalty were not sustainable.

Ratio Decidendi: Where dissimilar commodities are cleared as a combination pack and one item is effectively supplied free or not separately sold, valuation under Section 4A is to be based on the MRP of the combination pack, unless the revenue establishes a legally sustainable basis to reject the declared retail sale price.

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