The main legal point established in the judgment is the interpretation of the provisions of Section 4A of the Central Excise Act, Section 83(r) of the Standards of Weights and Measures Act, and Rules 17 and 34(1)(b) of the Standards of Weights and Measurements (Packaged Commodities) Rules in the context of the impugned circular.

The petitioner has prayed for declaration that Circular No.492/58.99-CX (F.No.341/52/99-TRU) dated 2.11.99 issued by the respondent No.1, Central Board of Excise and Customs as null and void and contrary to the provisions contained in Articles 14, 19(1)(g) and 265 of the Constitution of India and contrary to Section 38B of the Central Excise Act, 1944, Section 83(r) of Standards of Weights and Measures Act, 1976, Rules 17 and 34(1)(b) of the Standards of Weights and Measurements (Packaged Commodities) Rules, 1977.

2. Petitioner firm is engaged in the manufacture of herbal hair dye which falls under Chapter sub-heading 3305.99 of Central Excise Tariff Act, 1985. Under Notification No.20/99 CE (NT) dated 28.2.1999, herbal hair dye manufactured by the petitioner are packed in sachets of 8 gms in weight in Photo Protective Pouch and six such pouches were being packed in a Mono Carton. Since the net weight of the individual pouch did not exceed 10 gms, the petitioner was assessed on the basis of wholesale price under Section 4(1)(a) of the Central Excise Act, 1944. The Central Government introduced Section 4A of the Act with effect from 14.5.1997 as per Section 82 of the Finance Act, 1997, which contains a special provision for the valuation of excisable goods with reference to retail sale price, if the following two conditions are satisfied, namely (1) there is a notification specifying the goods assessed with reference to retail sale price and (2) the manufacture is required under the provisions of Standards of Weights and Measures Act or the Rules made thereunder to declare retail price of such goods on the package thereof.

3. While the matter stood thus, the first respondent has issued the impugned circular. According to the petitioner, such circular cannot be issued in the purported exercised jurisdiction under Section 37B of the Central Excise Act, 1944 as such a question is covered under Section 82(r) of the Standards of Weights and Measures Act (hereinafter referred to as the Act). It is further contended that since exemption is contemplated under Rule 34 of the Standards of Weights and Measures (Packaged Commodities) Rules (hereinafter referred to as the Rules), the impugned circular is without jurisdiction as it takes away the effect of Rule 34.

4. The aforesaid contentions raised by the petitioner have been refuted by the respondents in their counter.

5. The relevant portion of the impugned circular is to the following effect:-

“ . . . 5. In view of the above statutory requirement for declaration of retail sale price under the Standards of Weights and Measures (Packaged Commodities) Rules, 1977 for multi-piece packages, it is clarified that in respect of multi-piece packages of a commodity intended for retail sale and which are notified under section 4A, they shall be assessed to excise duty under the provisions of section 4A of Central Excise Act, 1944. . . .”

6. It is appropriate at this stage to notice the relevant statutory provisions.

7. Section 4A of the Central Excise Act is to the following effect :-

“ SECTION 4A. Valuation of excisable goods with reference to retail sale price. - (1) The Central Government may, by notification in the Official Gazette, specify any goods, in relation to which it is required, under the provisions of the Standards of Weights and Measures Act, 1976 (60 of 1976) or the rules made thereunder or under any other law for the time being in force, to declare on the package thereof the retail sale price of such goods, to which the provisions of sub-section (2) shall apply.

(2) Where the goods specified under sub-section (1) are excisable goods and are chargeable to duty of excise with reference to value, then, notwithstanding anything contained in section 4, such value shall be deemed to be the retail sale price declared on such goods less such amount of abatement, if any, from such retail sale price as the Central government may allow by notification in the Official Gazette.

(3) The Ce