Free supply and no transfer of ownership excluded Section 4A valuation; assessment had to proceed under Section 4.

Free supply of set-top boxes without transfer of ownership was treated as outside the concept of sale, so the retail sale price framework under the packaged commodities regime did not apply. On that basis, Section 4A of the Central Excise Act, 1944 was held inapplicable, and valuation for additional customs duty had to be made under Section 4 instead. The impugned orders were set aside and the appeals were allowed.

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Issues: Whether set top boxes supplied free of cost without transfer of ownership could be treated as sold goods for applying Section 4A of the Central Excise Act, 1944 for valuation and additional customs duty, or whether valuation had to be under Section 4 of that Act.

Analysis: The goods were supplied free of cost and ownership was not transferred to the customers. In the absence of a sale, the definition of retail sale price under the Standards of Weights and Measures framework was not attracted, and the statutory scheme governing packaged commodities could not bring the goods within the ambit of Section 4A. The cited principle was that Section 4A applies only where the package is intended to be sold and a retail sale price is relevant; if there is no sale, valuation must fall back on the general provision.

Conclusion: Section 4A of the Central Excise Act, 1944 was inapplicable, and valuation for additional customs duty had to be made under Section 4 of the Central Excise Act, 1944. The impugned orders were set aside and the appeals were allowed.

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