Small packaged goods within the 20 gms limit remain exempt from MRP declaration and fall under Section 4 valuation.

Rule 34 of the Standards of Weights and Measures (Packaged Commodity) Rules, 1977 exempts packages containing a commodity with net weight of 20 gms or less from M.R.P. declaration. That exemption is not lost merely because the package contains multiple units, so long as the combined weight remains within the prescribed limit. On that basis, such goods are not valued on the M.R.P. basis under Section 4A of the Central Excise Act, 1944, but are assessable under Section 4.

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Issues: Whether small packages containing three units of the goods, with combined weight below 20 gms, were exempt from declaration of M.R.P. under Rule 34 of the Standards of Weights and Measures (Packaged Commodity) Rules, 1977 and, as a consequence, assessable under Section 4 of the Central Excise Act, 1944 rather than under Section 4A of that Act.

Analysis: Rule 34 grants exemption in respect of any package containing a commodity where the net weight of the commodity is 20 gms or less. The wording of the rule was held not to support the Department's contention that the exemption is unavailable merely because the package contains several units. Since the combined weight of the three units was less than the prescribed limit, the exemption was applicable and the valuation provisions based on M.R.P. did not apply.

Conclusion: The packages were exempt from declaration of M.R.P. under Rule 34 and the goods were assessable under Section 4 of the Central Excise Act, 1944, not under Section 4A.

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