Wholesale package classification bars MRP-based excise assessment where cartons are meant only for distribution convenience.

Packs containing 100 chocolates of 5.5 g each were treated as wholesale packages rather than multi-piece packs for MRP-based assessment under Section 4A of the Central Excise Act, 1944. The deciding factor was whether the package as a whole was intended for retail sale to the ultimate consumer. Applying Rule 34 of the Standards of Weights and Measures (Packaged Commodities) Rules, 1977, and the definitions of wholesale package and multi-piece pack, the larger cartons were found to contain individual chocolates only for distribution convenience, not for retail sale as a composite pack. The demand based on MRP assessment therefore could not stand.

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Issues: Whether packs containing 100 chocolates, each of 5.5 gms, were wholesale packages or multi-piece packages liable to assessment under Section 4A of the Central Excise Act, 1944 on the basis of MRP.

Analysis: The determining factor was whether the package as a whole was intended for retail sale, and not merely whether the individual pieces inside could be sold in retail. Rule 34 of the Standards of Weights and Measures (Packaged Commodities) Rules, 1977, and the definitions of wholesale package and multi-piece pack under Rule 2(x) and Rule 2(j) were applied to hold that where individual chocolates were packed in larger cartons only for distribution convenience, and the larger pack itself was not intended for retail sale to the ultimate consumer, the package did not answer the description of a multi-piece pack for MRP assessment.

Conclusion: The packs of 100 chocolates were not liable to MRP-based assessment under Section 4A of the Central Excise Act, 1944 and the demand could not stand.

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