Circular No 673/64/2002-CX.

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Circular No 673/64/2002-CX.
28^th Oct, 2002

F.No.6/11/2002-CX.I
Government of India
Ministry of Finance
(Department of Revenue)

Subject:- Section 4A of the Central Excise Act, 1944.

            I am directed to invite your attention to Board’s Circular No. 639/30/2002-CX. dated 24.5.2002 regarding Section 4 A of the Central Excise Act, 1944.

2.         A number of representations have been received from Trade Associations as well as field formations about difficulties in implementing the said Circular.

3         The matter has been therefore further examined in the Board and it has been decided to modify Board’s Circular No. 639/30/2002-CX. dt. 24.5.2002 to the effect that once an MRP is scored out, ( even if it remains visible) and another MRP printed on the package , it could not be said that the package has two MRPs printed on it, since the scored out MRP could not be considered as an MRP either by the seller or by the consumer. Hence the scored out MRP is to be ignored.

4.         I am also directed to 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.

5.         "Multi-piece package" has been defined in Rule 2(j) of "The Standards of Weights and Measures (Packaged Commodities) Rules, 1977". Rule 17 of the said Rules mentions the additional declaration required to be made on multi-piece packages.

6.         This Circular may be brought to the notice of the field formations.
7.         Suitable Trade Notice may be issued for the benefit of the Trade.

8.         Hindi version will follow.

9.         Receipt of these instructions may be acknowledged.

(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.