Rule 34 MRP exemption applies to specially packed goods for industrial captive use; Section 4A valuation was inapplicable.

Superfine Spray Plaster supplied in 25 kg bags to a construction industry buyer for captive use fell within the Rule 34 exemption because the packages were marked as not for resale and were specially packed for the exclusive use of an industry for servicing that industry. The later enlargement of the concepts of industrial and institutional consumer did not curtail that exemption. On that basis, the goods were not required to bear a retail sale price declaration, so valuation remained under Section 4 of the Central Excise Act, 1944 rather than the MRP-based regime under Section 4A. Demands founded on Section 4A were therefore unsustainable, and consequential relief followed.

---

---

Issues: Whether Superfine Spray Plaster cleared in 25 kg PP bags to a construction industry buyer for captive use was exempt from declaration of retail sale price under Rule 34 of the Standards of Weights and Measures (Packaged Commodities) Rules, 1977, so that valuation had to be made under Section 4 of the Central Excise Act, 1944 and not under Section 4A of that Act.

Analysis: The goods were supplied to an industrial buyer for use in its construction activity, and the packages bore the declaration that they were not for resale. The relevant exemption in Rule 34 applies where the marking on the package shows that it has been specially packed for the exclusive use of any industry as a raw material or for servicing any industry. The later amendment enlarging the scope of institutional and industrial consumer did not curtail that exemption. On the facts, supply of the material to the construction industry for captive use was treated as supply for servicing that industry, and the cited precedents on similar bulk supply and industrial use supported that view. The contrary authorities were distinguished on facts.

Conclusion: The goods were covered by the exemption from affixation of MRP, and Section 4A did not apply. Valuation under Section 4 was correct.

Final Conclusion: The demands based on Section 4A could not be sustained, and the assessees' appeals succeeded with consequential relief.

Ratio Decidendi: Where goods are specially packed and marked for the exclusive use of an industry for servicing that industry, the package falls within the Rule 34 exemption and valuation cannot be shifted to the MRP-based regime under Section 4A.

---