Confectionery valuation under Section 4A and Section 11D fails where wholesale packs need no retail price marking and no duty was collected.

Sugar confectionery sold in 500 gram wholesale packs, with individual pieces below 10 grams, was held outside Section 4A valuation because Rule 34(b) of the Packaged Commodities Rules exempted such packages from retail sale price marking; assessment therefore had to proceed under Section 4. Section 11D could not be applied where the differential amount was not actually collected from buyers and credit notes were issued, since the statutory condition of collection of duty as such was not satisfied. The impugned orders were set aside and the demands failed on merits.

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Issues: (i) Whether sugar confectionery of less than 10 grams per piece, packed in 500 gram packs, was liable to valuation under Section 4A of the Central Excise Act, 1944 or under Section 4 of the Central Excise Act, 1944; (ii) whether the demand confirmed under Section 11D of the Central Excise Act, 1944 was sustainable when the differential amount was not collected from customers and credit notes were issued.

Issue (i): Whether sugar confectionery of less than 10 grams per piece, packed in 500 gram packs, was liable to valuation under Section 4A of the Central Excise Act, 1944 or under Section 4 of the Central Excise Act, 1944.

Analysis: The dispute was governed by the principle already applied in the appellant's own case, where wholesale packs of confectionery were held not to be retail packs merely because the individual pieces were below 10 grams. Rule 34(b) of the Standards of Weights and Measures (Packaged Commodities) Rules, 1977 exempted packages of goods of 10 grams or less from the requirement of printing retail sale price. The later substitution of Rule 2(j) did not alter that position, as Rule 34(b) remained intact and the product continued to fall outside the scope of retail sale price based assessment.

Conclusion: The goods were not liable to be assessed under Section 4A of the Central Excise Act, 1944, and the valuation could not be sustained on that basis.

Issue (ii): Whether the demand confirmed under Section 11D of the Central Excise Act, 1944 was sustainable when the differential amount was not collected from customers and credit notes were issued.

Analysis: Section 11D applies only where excise duty or an amount representing duty is actually collected from the buyer and not deposited with the Government. On the facts found, the appellant had issued credit notes for the differential amount and the amount was not collected, even though invoices reflected duty under Section 4A. In those circumstances, the statutory condition for invoking Section 11D was absent.

Conclusion: The demand under Section 11D of the Central Excise Act, 1944 was not sustainable.

Final Conclusion: The impugned orders were set aside and the appeals succeeded in full, as the valuation under Section 4A and the demand under Section 11D both failed on merits.

Ratio Decidendi: Confectionery sold in wholesale packs, where each individual piece is below the statutory threshold and no retail sale price is required to be affixed, is not assessable under Section 4A; and Section 11D can be invoked only when an amount representing duty has actually been collected from the buyer.

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