Area-specific MRP valuation under Section 4A cannot use a higher price from packages meant for other markets.

For valuation of air conditioners under Section 4A, the higher MRP declared on packages meant for other areas could not be adopted for goods actually sold in Silvassa at a lower MRP. Explanation 2(a) applies only where more than one retail sale price is declared on the same package, and no such multiple declaration was found on the Silvassa packages. The declared Silvassa MRP was actually charged, with no excess collection, while Explanation 2(b) supported area-specific MRPs on different packages. The demand based on the higher depot-bound MRP was therefore unjustified, and the penalties founded on that demand could not survive.

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Issues: Whether, for valuation of air conditioners under Section 4A, the higher MRP declared on packages meant for sale in other areas could be adopted for goods actually sold in Silvassa at a lower MRP, and whether the demand and penalties based on such adoption were sustainable.

Analysis: Explanation 2(a) to Section 4A applies only where more than one retail sale price is declared on the same package. The packages sold directly in Silvassa carried only one MRP, and there was no finding that any single package bore multiple MRPs. The declared Silvassa MRP was actually charged, and no excess amount was collected. The reasoning was supported by the scheme of Section 4A and Explanation 2(b), which recognises different retail sale prices declared on different packages for different areas and requires each such price to be adopted for goods intended for that area. The demand based on the higher MRP for depot-bound packages was therefore not justified, and the penalties founded on that demand could not survive.

Conclusion: The higher MRP could not be adopted for the Silvassa clearances, and the demand and penalties were unsustainable.

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