1 IN THE HIGH COURT OF JUDICATURE OF BOMBAY CIVIL APPELLATE JURISDICTION WRIT PETITION NO. 4334 OF 2008 Commissioner of Central Excise Pune-II .. Petitioner V/s State of of Maharashtra and others. .. Respondents Mr. A. S. Rao, for the petitioner Mr. V. A. Sonpal, AGP for Respondents 1 and 2. Mr. Ravi Kadam, Adocate General with Mr. S. M. Gorwadkar for respondent no.3 Mr. D. Zaiwala i/b Mr. S.M. Gorwadkar for respondent-4 CORAM: V. C. DAGA, & MRS. MRIDULA BHATKAR, JJ. DATED: 18th February, 2009 P. C. 1. Heard learned counsel for the petitioner and the counsels appearing for the respondents. 2. The petition is directed against the order dated 26.9.2005 as well as 20th July, 2007 passed by the Respondent No.1 granting exemption in favour of the Respondent Nos. 3 and 4 from the operation of the provisions of Standards of Weights and Measurement Act, 1976. The apprehension raised by the petitioner has been clarified by 2 the Central Board for Excise and Customs, New Delhi, vide their Circular No. 625/16/2002-CX, dated 28.2.2002, wherein, they have clarified in the following words. “1. I am directed to say that doubts have been raised regarding mode of valuation to be adopted in respect of goods notified under Section 4-A of the Central Excise Act, 1944, which are partly sold with the retail price printed on the packages and partly sold without printing the retail price on the packages. It has been reported that the problems are being faced in respect of virtually all the commodities notified under Section 4-A i.e. Lubricants, toilet soaps, paints and varnishes, automobile bulbs, baby powder, duplicating stencil paper, adhesive tapes, cameras, batteries, aerated water, pressure cooker instant coffee, unrecorded audio/video cassettes, shampoo, ceramic glazed tiles, other edible preparations etc. Some of the situations, where MRP cannot be printed on the notified item, as brought out by the Commissioners, are mentioned below: 1. Bulk supplies for personal as well as industrial use. 2. Supplies in bulk against contracts to DGS and D, Govt. Deptts., restaurants/hotels etc. 3. Supplies to Canteen Stores, Depots (CSD) of the denfese services. 4. Items supplied free with another consumer items as marketing strategy. Example one Lux Soap free with one box of Surf. 5. Items supplied free as marketing strategy or for guaging the market response. Example physician samples, bubble gums etc. 6. Items meant for export, etc. 3 2. The matter has been examined, Sec. 4-A of the Central Excise Act, 1944, is applicable in respect of those cases only where the manufacturer is legally obliged to print the MRP on the packages of the goods under the provisions of the Standards of Weights and Measures Act, 1976 or the rules made thereunder or any other law for the time being in force. 3. In respect of telephones falling under Heading 85.17 and notified under Section 4-A it was noticed that the manufacturers also make bulk supplies of telephone instruments to the dept. of Telecommunication (DOT) and the MTNL, who in turn provide these instruments, on rental basis, to the telephone subscribers. The ownership of the telephone instruments remains with the telephone department and there is therefore no retail sale involved. The manufacturers also sell instruments in the open market on which MRP is printed. The issue therefore, was how to value the telephone sets which were sold by the manufacturer in bulk to the telephone dept. The matter was referred to the Ministry of Law who have pointed that valuation of telephone instruments supplied in bulk to the telephone dept. will be done as per Section 4 of the Central excise Act, 1944 1944 and the instruments sold in the market, with P printed MRP, would be assessed under Section 4A of the Act The Ministry has accepted the opinion of the Law Ministry. 4. The basic issue, therefore, is to determinate the circumstances in which Section 4A of the CE Act can be applied. The wording of Section 4A(1) makes it very clear that it will apply only to such goods “... in relation to which it is required, under the provisions of the Standards of Weights and Measures Act, 1976, or the rules made thereunder, or under any other law for statutory requirement under the provisions of Weights 4 and Measures Act to declare the retail sale price on the packages, Sect. 4-A will not apply. As for example, in respect of bulk sale of ice-cream to hotel/restaurants which are not meant for retail sales as such, the provisions of the Weights and Measures Act will not apply, Chapter V of the Weights and Measures ( Packaged Commodity) Rules, 1977 mentions the instances where MRP is not required to be printed on the packages. Thus, in these cases valuation will have to be done under Section 4 of the C.E. Act. 5. A somewhat similar issue was examined by the Broad earlier vide letter F F No. 341764/97 TRU dt. 11.8.1987 (1997 (95) ELT T-3. This clarification was issued in the context of Certain Assessees printing MRP on packages even where there was no statutory requirement to do so under the Standards of Weights and Measures Act, 1976, it was clarified that in such cases duty will be charged under Section 4 of C.E. Act and not under Section 4-A (the clarification dt. 11.8.97 did not, however, specifically mention whether the disputed goods were notified under Section 4-A or not and whether it covered only non- notified goods.) 6. It is, therefore, clarified that, in respect of all goods (whether notified u/s 4A or not) which are not statutorily required to print/declare the retail sale price on the packages under the provisions of the Standards of Weight & Measures Act, 1976 or under Section 3(2) of the Central Excise Act, 1944, if tariff values have been fixed for the commodity). Thus, there could be instances where the same notified commodity would be partly assessed on the basis of MRP u/s 4A and partly on the basis of normal price (prior to 1.7.2000 ) or transaction value (from 1.7.2000) u/s 4 of the C.E. Act, 1944.” 5 In view of the above circular which is binding on the Revenue, the Revenue can always make assessment under section 4 of the Central Excise Act, 1944. The learned Counsel for the Respondents 3 and 4 have stated that they have no objection, if the assessment is done under Section 4 of the Central Excise Act, 1944 subject to the defences as may be available to them on merits of the valuation. In this view of the clarification, it is not necessary to entertain this petition. The petitioner is accordingly disposed of with no order as to costs. (MRS. MRIDULA BHATKAR) (V. C. DAGA) jpc/-