Manufacture and retail package valuation principles barred separate duty on free face wash gel packed with shampoo.

Combining anti-dandruff shampoo with face wash gel was treated as manufacture under Chapter Note 5 to Chapter 33, following the respondent's earlier case on the same process. The shampoo was also cleared as a retail package covered by Section 4A of the Central Excise Act, 1944. On that basis, the face wash gel supplied free with the shampoo did not attract separate central excise duty, and the circular on multi-piece packages was held inapplicable. The revenue's appeal therefore failed.

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Issues: Whether the activity of combining anti-dandruff shampoo with face wash gel amounted to manufacture and whether duty was leviable on the face wash gel supplied free along with shampoo cleared under a retail sale price scheme.

Analysis: The appeal turned on the earlier decision in the respondent's own case for a previous period, where the same process was held to amount to manufacture under Chapter Note 5 to Chapter 33. It was also undisputed that the shampoo was covered by Section 4A of the Central Excise Act, 1944 and that the goods were cleared as one retail package. On that basis, the face wash gel supplied free did not attract a separate duty liability, and the revenue's reliance on the circular governing multi-piece packages was held to be inapplicable.

Conclusion: The issue was decided in favour of the respondent. No separate Central Excise duty was payable on the free face wash gel, and the revenue's appeal failed.

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