Declared MRP must be accepted under valuation rules; area labels and contract price cannot replace a genuine retail sale price.
For valuation under Section 4A, a duly declared retail sale price must be accepted unless the law specifically requires otherwise or there is evidence that the declared MRP is not the applicable price. The rules did not require the package to state the area or region for which a particular MRP applied, so region-wise MRPs could not be rejected merely for lack of area identification. In clearances to institutional or project buyers, the declared MRP for that buyer class had to be accepted, and the contract price could not be substituted as the retail sale price. Duty demands and penalties based on such substitution were unsustainable.
Issues: (i) Whether, for valuation under Section 4A, the manufacturer was required to declare the area or region for which a particular retail sale price was intended when different MRPs were adopted for different regions; (ii) Whether, in clearances to institutional or project buyers, the contract price could be treated as the retail sale price, or whether the MRP declared for that buyer class had to be accepted.
Issue (i): Whether, for valuation under Section 4A, the manufacturer was required to declare the area or region for which a particular retail sale price was intended when different MRPs were adopted for different regions.
Analysis: Section 4A contemplates valuation with reference to the retail sale price declared on the package. The provision, as well as the related rules, does not require the package to specify the area or region to which a particular MRP applies. Rule 6 of the Standards of Weights and Measures Rules, 1977 also does not impose such a requirement. Where different MRPs are genuinely declared for different areas and there is no evidence that goods meant for a particular area were sold at a higher price than the declared MRP, there is no basis to discard the declared region-wise MRPs and substitute the highest MRP applicable to another region.
Conclusion: The different MRPs declared for different areas were required to be accepted, and there was no authority to insist on declaration of the area on the package.
Issue (ii): Whether, in clearances to institutional or project buyers, the contract price could be treated as the retail sale price, or whether the MRP declared for that buyer class had to be accepted.
Analysis: The expression retail sale price means the maximum price at which the packaged goods may be sold to the ultimate consumer. Institutional or bulk buyers who do not resell the goods can still be ultimate consumers for this purpose. If a separate MRP is fixed for such a class of buyers, that declared MRP constitutes the relevant retail sale price. The Department could not ignore that declared MRP and substitute the highest MRP applicable to general buyers merely because actual sales were made at prices below the declared MRP. The contract price was not the same as the MRP declared for the institutional buyer class.
Conclusion: The contract price could not be treated as the retail sale price, and the MRP declared for institutional or project buyers had to be accepted.
Final Conclusion: The duty demands and penalties based on rejection of the declared regional MRPs and on substitution of the highest general MRP or contract price were unsustainable, so the appeals succeeded.
Ratio Decidendi: For valuation under Section 4A, a duly declared retail sale price must be accepted unless the law specifically requires otherwise or there is evidence that the declared MRP is not the applicable retail sale price; neither area-wise identification on the package nor substitution of a higher MRP or contract price is permissible merely on assumption.