MRP-based excise valuation applies to notified goods in bulk supply absent a statutory exemption under packaged commodities rules.

Telephone instruments notified under section 4A of the Central Excise Act were held to fall under the MRP-based valuation scheme where the package had to declare retail sale price under the Standards of Weights and Measures law and the Packaged Commodities Rules. Bulk supply to DOT/MTNL, retention of ownership by the department, or later rental use by subscribers did not by itself create a statutory exception or justify valuation under section 4. The majority also held that a Board circular cannot narrow the statutory reach of section 4A. The dissent considered the circular and an earlier Tribunal view sufficient to support section 4 valuation for bulk supplies.

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Issues: Whether telephone instruments supplied in bulk to DOT/MTNL were required to be assessed under section 4A of the Central Excise Act, 1944 on the basis of the retail sale price, or under section 4 on contract price.

Analysis: The majority held that section 4A applies to specified goods where the package is required under the Standards of Weights and Measures law and the Packaged Commodities Rules to declare retail sale price. The fact that the goods were supplied in bulk to DOT/MTNL, or that the ownership remained with the department and the instruments were later provided to subscribers on rental basis, was not treated as a statutory exception. The goods were notified under section 4A, and no exemption under Rule 34 of the Packaged Commodities Rules was shown to exclude them from the MRP-based regime. The majority further held that a Board circular cannot curtail the statutory scope of section 4A, and that valuation cannot be diverted to section 4 merely because the sale was to a bulk purchaser.

Conclusion: The telephone instruments were assessable under section 4A and not under section 4, and the assessee's appeal succeeded on the valuation issue.

Dissenting Opinion: The dissent took the view that the binding circular and the earlier Tribunal decision justified assessment under section 4 for bulk supplies to DOT/MTNL, and considered reference to a larger bench appropriate.

Ratio Decidendi: For goods validly notified under section 4A, assessment is governed by the MRP-based scheme unless the goods are shown to fall within a statutory exemption under the Packaged Commodities Rules; the identity of the bulk purchaser does not by itself take the goods outside section 4A.

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