Wholesale packs with multiple retail pouches are not automatically assessable on MRP basis; transaction value applies instead.

Goods cleared in larger wholesale packs containing multiple retail pouches were held to fall outside MRP-based assessment under section 4A of the Central Excise Act where the outer packs were intended for distribution through trade intermediaries and were not shown to bear MRP or be meant for retail sale as such. The fact that the inner pouches carried retail declarations did not, by itself, attract section 4A. The larger packets were treated as wholesale packages, so valuation remained under section 4 on transaction value. Consequently, the demand and penalties founded on section 4A were set aside, with consequential relief to the assessees.

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Issues: Whether the goods cleared in larger packets containing multiple retail pouches were liable to duty under section 4A of the Central Excise Act, 1944 on MRP basis, or under section 4 of that Act on transaction value basis.

Analysis: The relevant packaging rules distinguish between retail packages and wholesale packages. A wholesale package includes packages intended for sale to an intermediary and packages containing ten or more retail packages where the individual retail packages are properly labeled. On the admitted facts, the larger packets contained 20/27 pouches and were meant for distribution through trade intermediaries. No material showed that those larger packets were marked with MRP or intended for retail sale as such. In these circumstances, the larger packets answered the description of wholesale packages and did not attract MRP-based assessment merely because the individual pouches were separately marked.

Conclusion: The goods in the larger packets were not liable to assessment under section 4A on MRP basis and were correctly assessable under section 4 in respect of the retail packages. The demand and penalties founded on section 4A could not be sustained.

Final Conclusion: The appeals succeeded, the impugned order was set aside, and the assessees obtained consequential relief.

Ratio Decidendi: Where goods are cleared in larger wholesale packs containing multiple retail pouches and the wholesale packs are neither intended for retail sale nor shown to bear MRP, assessment under section 4A is not attracted merely because the individual pouches carry retail declarations; valuation remains under section 4.

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