Section 4A valuation applies only where retail sale price is required and goods are intended for sale, not free supply.

Goods cleared in 50 ml bottles for free distribution, without any element of retail sale, were not assessable under section 4A of the Central Excise Act, 1944. The governing principle applied was that section 4A operates only where the package is required to bear a retail sale price and is covered by the standards of weights and measures framework. Where the goods are supplied free, the retail sale price requirement is irrelevant and valuation falls under section 4. On that basis, the demand founded on section 4A valuation was held unsustainable and valuation under section 4 was upheld.

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Issues: Whether goods cleared in 50 ml bottles for free distribution, without an element of retail sale, were assessable under section 4A of the Central Excise Act, 1944 or under section 4 of that Act.

Analysis: The goods had been cleared on contract price for supply with seeds and were not meant for sale in the market. The Tribunal relied on its earlier decision in the assessee's own case and on the Supreme Court's ruling in Jayanti Food Processing and Nestle India. The governing principle applied was that section 4A is attracted only where the package is required to bear retail sale price and there is an element of sale as contemplated by the Standards of Weights and Measures law. If the package is meant for free supply and no retail sale price is required or relevant, the package falls outside section 4A and is valued under section 4.

Conclusion: The goods were not liable to assessment under section 4A and were assessable under section 4. The Revenue's appeal failed.

Final Conclusion: The demand based on section 4A valuation was not sustainable on the facts found, and the assessee's assessment basis was upheld.

Ratio Decidendi: Section 4A applies only when the package is one for which retail sale price is required and there is an element of sale; goods intended for free supply without such sale are to be valued under section 4.

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