1.1 Revenue is in appeal against the order of CCE(A) who has set aside the order of the lower authority on assessment of "Sugar Free Tablets & granules" ordered to be made on MRP based assessment under Section 4A of the Central Excise Act for clearance during April 2001 of samples of the goods in regular/normal packages containing 100 tablets to M/s Cadilla Healthcare which was called for as per notification No. 5/2001 CE (NT) dated 1.3.2001. The assessee had cleared the goods on payment of duty on value under Section 4 on advalorem rate under heading 2108.99.
1.2 The CCE(A) had taken the view that although MRP was printed on the product but that was not a legal requirement/obligation/statutorily required as subject goods were clearly and conspicuously declared as sample, not for sale, hence provisions of Standards of Weights & Measures Act, 1976 shall not apply and was covered by Board's Circular No. 625/6/2002-CX dated 28.2.2002.
1.3 Samples were shown to us bearing no MRP declarations. The matter was therefore got verified & the Ld. DR on instructions from the Commissioner reported and placed a factual report F.No. IV/3-75/01A/04 dt. 8.02.05. Perusal of the report reveals: a) respondents had cleared free sample of sugar free tablets in regular/normal packets and each packet contained 100 tablets x 1 gm ie. 100 gms.
b) Truth is that no MRP was printed on the "free sample". However, it is important to report that MRP Rs. 47.00 has been printed on similar goods of identical packing quantity which was meant for sale.
c) The sample produced before Tribunal cannot/does not appear to be related to this subject matter as the said sample appears to have been taken from old Batch No. 351, while goods in dispute belong to Batch Nos. 1073 to 1077.
d) Regarding applicability of Board's Circular No. 625/16/02-CX dated 28.02.2002, it was submitted that Section 4A would be applicable provided there was statutory requirement under the provisions of Weights & Measures Act to declare retail sale price on the package and as per provision of Rule 34(b) under that Act such printing is not statutory requirement if product is of quantity 20gms or less which in this case is in 100 gms and thus it is statutorily required, attracting Section 4A of the Central Excise Act, 1944.
The Ld. DR also reiterated the grounds and plea in the report on above terms.
2.1 The Ld. Advocate for the respondent relies upon Rule 3 of the Standard of Weights & Measures (Packaged) Commodities Rules, 1977 which stipulates that the provisions of Chapter II of the said rules of declaration of MRP etc. will apply only to packages intended for retail. No MRP statutory declaration was mandatory, hence as per Board's instructions assessments under Section 4A was not called for.
The reliance placed on rule 34 was applicable to all the provisions of these Rules and not under Chapter II. It was also pleaded that vide para 4 of the Board's Circular No. 626/16/02-CX. Dated 28.2.2002 assessments under Section 4A will not apply and Section 4 value determination and thereafter advalorem duty as paid were in order.
2.2 After perusal of the rules, & Board's instructions and on finding that the admitted fact is "no MRP was printed on the `free sample'", i.e the exemption under rule 3 availed and no objection from the State government authorities, who were as per para 7 of Board's authority are proper authority to determine the statutory mandatory printing requirement of MRP, is on record, then there can be no reason to assess the `free sample' under Section 4A of the Central Excise Act, 1944.