Section 4A valuation applied to free-distribution television supplies because the recipient was not an institutional consumer.

Valuation of colour television sets supplied for free distribution under a government scheme turned on whether the recipient undertaking qualified as an institutional or industrial consumer under the packaged commodities rules. The controlling view was that it did not, so the exclusion from Section 4A of the Central Excise Act, 1944 was unavailable and valuation under Section 4A remained appropriate rather than Section 4. Applying the coordinate Bench ruling on the same supply arrangement, the contrary demand could not be sustained, and the related interest and penalty were also set aside.

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Issues: Whether the value of colour television sets supplied for free distribution under a government scheme was liable to be assessed under Section 4A of the Central Excise Act, 1944, or under Section 4 of that Act, and whether the demand, interest and penalty could survive.

Analysis: The issue was treated as already settled by a coordinate Bench decision on the same supply arrangement. The controlling reasoning was that the recipient undertaking, while arranging free distribution of the televisions to the public, did not answer the description of an institutional consumer or industrial consumer under the relevant packaged commodities rules. On that basis, the exclusion from Section 4A did not apply, and valuation under Section 4A remained proper. Since the present dispute was covered by that binding view, there was no occasion to sustain the contrary demand or penalty.

Conclusion: The valuation under Section 4A was held applicable, and the impugned demand, interest and penalty were set aside in favour of the assessee.

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