Retail sale price valuation applies only where MRP declaration is legally required, not for free-distribution promotional goods.

Goods supplied under a contract for free distribution through a sales promotion scheme were held assessable under section 4, because section 4A applies only where the package is statutorily required to bear retail sale price under the Standards of Weights & Measures regime. As the goods were not to be sold as such to the ultimate consumer and no retail sale price was required to be declared, Rule 34(a) and the clarifying notification supported valuation under section 4. The Tribunal followed the earlier identical ruling and rejected valuation under section 4A merely because the commodity was a notified item. The demand based on section 4A was therefore unsustainable.

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Issues: Whether goods supplied under a contract for free distribution through a sales promotion scheme were assessable under section 4 of the Central Excise Act, 1944 or under section 4A of the Central Excise Act, 1944, and whether the packaging requirements under the Standards of Weights & Measures regime applied so as to attract valuation on the basis of retail sale price.

Analysis: The package was supplied to a buyer who was to distribute it free along with another product, and the package did not carry a retail sale price for sale to the ultimate consumer. The decisive test was whether the package was statutorily required to bear MRP under the Standards of Weights & Measures Act, 1976 and the Rules made thereunder. The earlier binding ruling on identical facts held that where the goods are not sold by the buyer as such but are used for free distribution, section 4A does not govern valuation. The notification clarifying that goods not required to declare retail sale price are to be valued under section 4, together with the exemption principles under Rule 34(a), supported that position. The Tribunal therefore found that section 4A could not be applied merely because the commodity was otherwise a notified item.

Conclusion: The goods were correctly assessable under section 4 of the Central Excise Act, 1944 and not under section 4A; the impugned demand based on section 4A could not be sustained.

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