MRP-based excise valuation applies only when retail sale price declaration is required for ultimate consumer sale.

Detergent powder supplied to industrial consumers for further free distribution is not assessable on MRP basis under Section 4A unless the package is required to declare a retail sale price for sale to the ultimate consumer. The article notes that a notified commodity may be partly assessed under Section 4A and partly under Section 4 depending on whether the statutory conditions for MRP-based valuation are satisfied. Where the goods are not sold in the retail market and are intended for free gifts or similar distribution, the Section 4A condition is not met, and valuation falls under Section 4 on transaction value.

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Issues: Whether detergent powder cleared to industrial consumers for further free distribution was assessable under Section 4A of the Central Excise Act, 1944 on MRP basis or under Section 4 on transaction value.

Analysis: The goods were supplied to industrial consumers, who used them for free distribution along with their own products, and the dispute turned on whether such clearances attracted the MRP-based regime. The Board's circular dated 28.2.2002 clarified that a notified commodity may be partly assessed under Section 4A and partly under Section 4, depending on whether the statutory conditions for MRP-based assessment are satisfied. Applying the Supreme Court's ruling on the scope of Section 4A and the Standards of Weights and Measures regime, the decisive factor is whether the package is required to declare retail sale price for sale to the ultimate consumer. Where the goods are not sold in the retail market and are supplied for free gifts, the condition for Section 4A is not met, and the goods fall within Section 4.

Conclusion: The clearances to industrial consumers were not liable to assessment under Section 4A and were assessable under Section 4.

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