Rule 34(b) exemption keeps cosmetics sold by weight or measure outside MRP-based excise valuation, preserving Section 4 assessment.

Lipsticks and nail polishes packed in larger boxes containing smaller boxes were not liable to MRP-based valuation under Section 4A of the Central Excise Act, 1944 because neither outer nor inner packs were intended for retail sale and the individual packs were the retail units. Where cosmetics are sold by weight or measure and fall within the Rule 34(b) exemption under the Standards of Weights and Measures (Packaged Commodities) Rules, 1977, the packaged commodities regime does not apply. The goods were therefore assessable under Section 4 rather than Section 4A, and the assessee's valuation under the normal excise provision was sustained.

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Issues: Whether lipsticks and nail polishes packed in larger and smaller boxes were liable to valuation under Section 4A of the Central Excise Act, 1944 on the basis of maximum retail price.

Analysis: The goods were found to be packed in larger boxes containing smaller boxes, but neither the larger nor the smaller boxes were intended for retail sale. The individual packs were the retail units. Rule 34(b) of the Standards of Weights and Measures (Packaged Commodities) Rules, 1977 exempts packages containing commodities of net weight below the prescribed limit from the application of the packaged commodities rules, including the rule relating to multi-piece packages. The applicable principle from the larger bench decision was that cosmetics sold by weight or measure, and falling within the Rule 34(b) limits, do not come within the purview of those rules and are assessable under Section 4 of the Central Excise Act, 1944 rather than Section 4A.

Conclusion: The goods were not liable to MRP-based valuation under Section 4A and were assessable under Section 4 of the Central Excise Act, 1944.

Final Conclusion: The department's challenge to the lower appellate authority failed and the assessee's valuation under the normal excise provision was sustained.

Ratio Decidendi: Cosmetics sold by weight or measure, and packaged for retail in a manner not attracting the packaged commodities rules due to the Rule 34(b) exemption, are outside Section 4A valuation and fall to be assessed under Section 4 of the Central Excise Act, 1944.

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