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of <h1>Valuation of toothbrushes for distribution under Central Excise Act</h1> <h3>M/s Contemporary Targett Pvt Ltd Versus C.C.E. & S.T. -Vadodara-I</h3> M/s Contemporary Targett Pvt Ltd Versus C.C.E. & S.T. -Vadodara-I - TMI Issues Involved:1. Whether the valuation of tooth brushes supplied in bulk or combo packs for free distribution should be assessed under Section 4 or Section 4A of the Central Excise Act, 1944.2. Applicability of the Standards of Weights and Measures Act, 1976, and related rules to the valuation of goods supplied for free distribution.Issue-wise Detailed Analysis:1. Valuation under Section 4 vs. Section 4A of the Central Excise Act, 1944:The appellant, engaged in manufacturing tooth brushes, supplied these in bulk/combo packs to toothpaste manufacturers for free distribution. The appellant assessed these tooth brushes based on transaction value under Section 4 of the Central Excise Act, 1944. The department contended that these should be assessed under Section 4A, i.e., on the MRP basis, as the toothpaste was packed with MRP and assessed accordingly.The appellant argued that the tooth brushes were not intended for retail sale, were not packed in retail packs, and did not have MRP declared. They cited the Bombay Tribunal's decision in International India Pvt. Ltd Vs. CCE-Goa and various other judgments supporting that goods not intended for retail sale should not be assessed under Section 4A.The Tribunal found that the tooth brushes were cleared in bulk or combo packs without retail packing and were used by toothpaste manufacturers for free supply. Thus, they were not sold in retail by either the appellant or the buyers. The Tribunal referred to the Supreme Court's decision in Jayanti Food Processing (P) Ltd. Vs. Commissioner of Central Ex., Rajasthan, which dealt with similar issues. The Supreme Court held that goods supplied for free distribution under a contract and not for retail sale should be assessed under Section 4, not Section 4A.2. Applicability of Standards of Weights and Measures Act, 1976, and Related Rules:The appellant argued that since the tooth brushes were not for retail sale and did not have MRP, the provisions of the Standards of Weights and Measures Act, 1976, and related rules did not apply. They cited the Board Circular No. 625/16/2002-CE and various judgments supporting their claim.The Tribunal agreed with the appellant, noting that the tooth brushes were supplied for free distribution and not for retail sale. Therefore, the provisions of the Standards of Weights and Measures Act, 1976, and related rules did not apply. The Tribunal referred to the Supreme Court's decision in Jayanti Food Processing (P) Ltd., which supported this view.Conclusion:The Tribunal concluded that the tooth brushes supplied by the appellant for free distribution by toothpaste manufacturers should be valued under Section 4 of the Central Excise Act, 1944, and not under Section 4A. The value adopted by the appellant under Section 4 was correct and legal. The impugned order was set aside, and the appeal was allowed.
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