Per V.K. Agrawal : The issue involved in this appeal, filed by the Revenue, is whether the Central Excise duty is payable by M/s. Kraftech Products Inc. on the assessable value determined under Section 4 of the Central Excise Act as claimed by Respondents or with reference to M.R.P. under Section 4A of the Central Excise Act as claimed by the Revenue.

2. Shri S.C. Pushkarna, learned D.R., submitted that the Respondents manufacture 'Godrej Permanent Powder Hair Dye' and "Godrej Kali Mehndi'' that they were packing these products in multi-piece packages and were clearing to their sole buyer M/s Godrej Soaps Ltd.; that a show cause notice dated 13.7.2000 was issued to the Respondents for assessing the multi-piece packages under the provisions of Section 4A of the Central Excise Act on the ground that multi-piece packages even if having the total weight of contents of all commodities less than 10 gms., required a declaration under Rule 17 of the Standards of Weights & Measures (packaged Commodities) Rules, 1977 (In short PCR, 1977) and were not eligible for exemption under Rule 34(b) of PCR, 1977; that the Commissioner, under the impugned Order, has held that the provisions of Rule 34 of PCR, 1977, are unambiguous in nature and the exemption applies to any package containing a commodity; that he has accordingly did not confirm the demand of Central Excise duty, etc. The learned DR mentioned that Rule 2(i) of PCR, 1977, defines 'multi-piece package' means a package containing two or more individually packaged or labelled pieces of the same commodities of identical quantity intended for retail sale, either in individual piece or the package as a whole; that Rule 6 of PCR, 1977 requires that every package shall bear thereon or on a label securely affixed thereto a definite plain and conspicuous declaration; that retail sale price of the packages is one such- detail to be declared by a manufacturer; that Rule 34(b) of PCR, 1977, provides that the "nothing contained in these Rules shall apply to any package containing a commodity if the net weight or measures of the commodity is twenty grams or twenty multi-litres or less, if sold by weight or measures." He submitted that the Central Board of Excise & Customs has clarified vide Circular No. 492/58/99-CX., dated 2.11.99[reported in 1999 (35) RLT M29] that the exemption under Rule 34(b) is applicable to a package containing a commodity and this exemption does not apply to multi-piece package and that in respect of multi-piece package 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 the Central Excise Act. The learned D.R. also relied upon the decision in the case of Varnica Herbs Vs. C.B.E. & C., New Delhi, 2004 (163) E.L.T. 160 (Mad.) wherein the Madras High Court has held after referring to Rule 2 (i), Rule 17 and Rule 34 (b) of PCR, 1977 Rules that:

"A perusal of these provisions makes it clear that articles kept in separate pouches by the petitioner can be termed as multi piece package and such pouches can be sold individually in single piece or together in a mono carton of six pouches. The contention of the petitioner that exemption under Rule 34 would be applicable is not acceptable. Even though the net weight is less than 10 grams, it is evident that article is not intended to be sold either by weight or by measure as contemplated under Rule 34 (b). The contention that clarification issued by the respondent No. 1 has the effect of whittling down the exemption granted under Section 34 is not at all acceptable."

3. On the other hand, Sh. R. Ravindran, learned Advocate, submitted that the only ground for the appeal of the Revenue is Board's Circular dated 2.11.99 which was not relied upon in the show cause notice or at any time during the adjudication proceedings; that thus Revenue cannot now rely on the same in the appeal before the Tribunal. He relied upon the decision in t