1984 (1) TMI 309 - AT - Central Excise

Summary

Issues:
1. Whether packing charges on pressure cookers are includible in the assessable value for excise duty purposes.

Analysis:
The case involved a dispute regarding the inclusion of packing charges in the assessable value of pressure cookers for excise duty purposes. The appellants argued that packing was not an integral part of the manufacturing process and should not be included in the assessable value. They contended that packing was done for transportation safety and should be considered a post-manufacturing expense. The department alleged that the appellants collected packing charges from wholesale purchasers and sought to include these charges in the assessable value. The Appellate Tribunal rejected the appeal, holding that packing charges formed an essential part of the assessable value as the goods were normally delivered in a packed condition.

The appellants further argued in their revision application that packing of pressure cookers was not incidental to manufacturing and was solely for transport safety. They cited instances of delivering pressure cookers without packing to support their claim. They relied on judgments like Voltas and the Atic cases to support their argument that packing charges should be excluded from the assessable value. However, the respondent contended that both cartons and wooden crates used for packing should be included in the assessable value, citing a Supreme Court judgment in the matter of Union of India v. Bombay Tyre International Limited. The respondent argued that the cost of secondary packing cannot be deducted from the wholesale cash price of excisable articles.

The Tribunal carefully considered the arguments of both parties and evaluated the normal practice of packing pressure cookers. The appellants claimed that pressure cookers were usually sold in cartons and crating was done for long-distance transportation. However, the Tribunal noted that the majority of pressure cookers were cleared in wooden crates during the relevant period. Relying on the Supreme Court judgment, the Tribunal held that the cost of crates should be included in the assessable value, as they were not shown to be special secondary packing ordered by customers. Therefore, the appeal was dismissed, and the inclusion of packing charges in the assessable value was upheld.