Central excise valuation for small tobacco pouches in multi-packs remains under Section 4, with Rule 34 exemption preserved.

Chewing tobacco sold in small sachets and repacked in poly packs was treated as assessable under Section 4 of the Central Excise Act, not Section 4A, because the individual pouches remained goods sold by weight and did not lose the Rule 34 exemption merely due to combined packing. The Tribunal relied on a Larger Bench view that pouches below 10 gms in multi-packs were covered by Section 4, and noted that the contrary Madras High Court view in Varnica Herbs was considered per incuriam. It also recorded that the Supreme Court affirmed this approach. On that basis, the demand and penalties were not sustainable.

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Issues: Whether chewing tobacco cleared in small pouches and further packed in poly packs was assessable under Section 4 of the Central Excise Act or under Section 4A of that Act, and whether such poly packs could be treated as multi-piece packages for denying the exemption under Rule 34 of the Standard of Weights and Measures (Packaged Commodities) Rules, 1977.

Analysis: The dispute turned on whether the individual sachets, each bearing weight and sold in a larger poly pack, remained goods capable of assessment by weight so as to attract the exemption in Rule 34. The Tribunal noted that a Larger Bench had already held that pouches of less than 10 gms sold in multi-packs were assessable under Section 4, and that the contrary view of the Madras High Court in Varnica Herbs was rendered per incuriam because it overlooked the legal requirement concerning sale by weight or measure. The Tribunal further noted that this view was affirmed by the Supreme Court, which agreed that a multi-piece package did not lose the benefit of the exemption merely because it was offered for sale in combined form.

Conclusion: The goods were assessable under Section 4 and not under Section 4A, and the demand and penalties could not be sustained.

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