Misdeclaration of MRP penalty fails where the department withholds primary evidence and records do not support the allegation.

Penalty for alleged misdeclaration of maximum retail price on television cartons was unsustainable because the department failed to produce the cartons, which were the best evidence of the charge. Section 4A of the Central Excise Act applies to notified goods valued by reference to retail sale price where the package must bear the declared MRP, but the allegation had to be proved by primary evidence. The available photographs showed MRPs matching the declared figures where legible, and the price circulars did not establish higher actual sales or tampering with the printed MRP. On that evidence, the penalty was set aside.

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Issues: Whether the penalty imposed on the assessee for alleged misdeclaration of maximum retail price on television cartons was sustainable on the evidence available.

Analysis: Section 4A of the Central Excise Act, 1944 governs valuation of notified goods with reference to retail sale price and applies where the package is required to bear the declared retail sale price. The allegation of misdeclaration rested on the department's assertion that the MRP printed on the seized cartons was higher than the MRP declared at the time of clearance. The cartons themselves, which were the best evidence to prove the allegation, were not produced by the department. In the absence of such primary evidence, an adverse presumption arose against the Revenue. The photographs filed by the assessee, where legible, showed printed MRPs tallying with the declared figures. The price circulars relied upon by the department did not establish actual sale at a higher price or tampering with the printed MRP.

Conclusion: The penalty for alleged misdeclaration of MRP was not sustainable and was set aside in favour of the assessee.

Ratio Decidendi: Where the department alleges misdeclaration of MRP, the burden lies on it to prove the charge by producing the best available evidence; in the absence of such evidence, and where available material does not support the allegation, penalty cannot be sustained.

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