Rule 34 exemption for small lipstick packs keeps valuation under transaction value, not retail sale price basis.

Lipstick packs weighing less than 20 gms fell within the exclusion in Rule 34(1)(b) of the Standards of Weights and Measures (Packaged Commodities) Rules, 1977, so the Packaged Commodities Rules did not apply. As a result, valuation on retail sale price basis under Section 4A of the Central Excise Act, 1944 was not attracted, and assessment had to be made on transaction value under Section 4. The Tribunal followed its earlier view that the Rule 34 limit determines whether the retail sale price regime applies. The exemption was therefore available and the Revenue's appeals failed.

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Issues: Whether lipstick packs of less than 20 gms were exempt under Rule 34(1)(b) of the Standards Weights and Measures (Packaged Commodities) Rules, 1977 and therefore assessable under Section 4 of the Central Excise Act, 1944 rather than Section 4A.

Analysis: The package weight was found to be below the threshold prescribed in Rule 34(1)(b), which excludes such packages from the operation of the Packaged Commodities Rules. On that basis, the goods did not attract valuation on retail sale price basis under Section 4A. The Tribunal followed its earlier view that where the net weight of the commodity is within the Rule 34 limit, the exemption is available and assessment must be made on transaction value under Section 4.

Conclusion: The exemption applied and the goods were assessable under Section 4 of the Central Excise Act, 1944, not under Section 4A. The Revenue's appeals failed.

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