2006 (4) TMI 418 - AT - Central Excise

Summary

Issues:
- Inclusion of cost of secondary packing in assessable value
- Refund claim on duty paid under protest

Analysis:

Inclusion of cost of secondary packing in assessable value:
The case involved the appellants engaged in manufacturing Diesel Oil Engine, sold in polythene and wooden packing. The dispute arose when a show cause notice contended that since a majority of sales were in wooden packing, the cost of wooden packing should be included in the assessable value. The Deputy Commissioner relied on precedents to support this argument. However, the appellant argued that goods were ordinarily sold in polythene packing at the factory gate, with wooden packing used for outstation buyers only. The appellant cited various decisions to support their stance. The Tribunal analyzed the issue in light of Supreme Court precedents, emphasizing that the cost of packing necessary to make goods marketable should be included. Considering the facts presented, the Tribunal concluded that the cost of wooden packing was not includible in the assessable value.

Refund claim on duty paid under protest:
The second appeal involved a refund claim for duty paid under protest on the cost of secondary packing. The claim was rejected on both merit and limitation grounds. The appellant argued that once the cost of secondary packing was deemed non-includible, the refund became admissible. Regarding the time bar, the appellant contended that duty was indeed paid under protest, supported by letters informing the department. The Tribunal referred to relevant decisions where the endorsement of "under protest" on gate pass sufficed as evidence of duty paid under protest. Consequently, the Tribunal held that the refund claim was admissible on merits and could not be denied on the basis of time limitation.

In conclusion, the Tribunal allowed both appeals, emphasizing that the cost of wooden packing was not includible in the assessable value and that the refund claim on duty paid under protest was valid.