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The provision of valuation under Section 4A of the Central Excise Act, 1944 would not be applicable on the goods, not intended for retail sale
December, 30th 2014

The provision of valuation under Section 4A of the Central Excise Act, 1944 would not be applicable on the goods, not intended for retail sale

We are sharing with you an important judgment of the Hon’ble CESTAT, Mumbai, in the case ofWyeth Ltd. Vs. CCE, Nasik [2014 (12) TMI 1026 - CESTAT MUMBAI on following issue:


Whether the provision of valuation under Section 4A of Central Excise Act, 1944 would be applicable on the goods not intended for retail sale?

Facts and background:

Wyeth Ltd. (“the Appellant”) was engaged in manufacturing of toothpaste which is notified under Section 4A of the Central Excise Act, 1944 (“Excise Act”). The Appellant manufactured Aquafresh brand of toothpaste on job-work basis for Glaxo Smith Kline Asia Pvt. Ltd. (“Smith Kline”). The Appellant cleared a consignment of toothpaste which was intended for resale under Section 4A of the Excise Act. However another consignment of toothpaste which were given as free samples by Smith Kline along with the Horlicks manufactured and sold by them were cleared on Cost Construction basis in terms of the Hon’ble Apex Court judgment in the case of Ujagar Print case.

The Department contended that since the toothpaste is notified under Section 4A of the Excise Act, it should have been cleared as such.

Accordingly, Show Cause Notice was issued and demands were confirmed by the Department. Being aggrieved, the Appellant preferred an appeal before the Hon’ble CESTAT, Mumbai.


The Hon’ble CESTAT, Mumbai after considering the provisions of the Standards of Weights and Measures Act, 1976 and Packaged Commodity Rules, 1977 and relying upon the decision in the case of Geoffery Manners and Co. Ltd. Vs. CCE [2006 (8) TMI 56 - CESTAT, MUMBAI]held that since the toothpaste were supplied as ‘free sample' and were not meant for retail sale, the provisions of Standards of Weights and Measures Act, 1976 and Packaged Commodity Rules, 1977 would not apply at all and, therefore, the provisions of Section 4A of the Excise Actwould also not apply.

Hope the information will assist you in your Professional endeavors. In case of any query/ information, please do not hesitate to write back to us.

Thanks and Best Regards,

Bimal Jain

FCA, FCS, LLB, B.Com (Hons)


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