Decided on July 24,2015

Commissioner Of Central Excise, Mumbai -I Respondents


RAJU,J - (1.)APPELLANT , M/s. Hindustan Lever Ltd., is manufacturing soaps which are commodity covered under the Maximum Retail Price (MRP) based assessment. They were clearing soaps in bulk to job -worker, namely, M/s. Ashapura Industries, who in turn were packing the individual soaps in multi -piece packaging.
(2.)The individual soaps cleared by the HLL were not marked with any MRP, however, the multi -piece pack was marked with MRP. Multi -piece packs also contain higher MRP, which was crossed and a lower MRP was indicated for sale and purchase of multi -piece pack.
Two show -cause notices were issued to them seeking to levy duty at the higher MRP (which was crossed out) printed on the multi -piece packaging. The Dy. Commissioner in his order dropped the demand relying on the Circular No. dated 28.10.2002 issued by CBE&C. The said circular say that there is no uniformity in valuation of multi -piece packages, consisting of 2 or more consumer items of the same kind, with MRP printed both on the individual items and the multi -pack. For valuing such multi -packs it is clarified that: - -

(i) if the individual items comprising the multi -pack have clear markings that they are not to be sold separately or are packed in such a way that they cannot be sold separately, then the MRP indicated on the multi -pack would be considered for payment of duty u/s. 4A.

(ii) if the individual items do not contain any such inscription (that they are not be sold separately) and are capable of being sold separately at the MRP printed on the individual pieces, then the aggregate of the MRP's of the pieces comprising the multi -pack would be considered for payment of duty on the multi -pack under section 4A. This clause will apply to only those multi -packs where the MRPs, both on the multi -pack and each of the individual items comprising the multi -pack, are clearly visible (e.g. soaps, powders, tooth pastes etc.). Only then can Explanation 2 (a) to section 4A apply.

(iii) if the individual items have MRP's printed on them but are scored out, then the MRP printed on the multi -pack will be taken for purposes of valuation under section 4A.

(iv) if an individual item is supplied free in the multi -pack and has no MRP printed on it, the MRP printed on the multi -pack will be taken for purposes of valuation under section 4A."

(3.)SUBSEQUENTLY , the said Order -in -Original was reviewed by Revenue and appeal was filed on two grounds. Firstly, on the ground that the said Circular is not applicable to the present case. Secondly, it sought to deny the deduction of the cost of carton claimed by the appellant in their clearance to M/s. Ashapura Industries. The Commissioner (Appeals) in his order did not allow the appeal on the first ground. However, on the second ground, the appeal of the Department was allowed, by denying the deduction of the cost of package.

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