1984 (5) TMI 244 - AT - Central Excise

Summary

Issues:
1. Inclusion of packing charges in the assessable value of superfine cement.
2. Interpretation of primary packing cost under Section 4 of the Central Excises and Salt Act, 1944.
3. Applicability of previous judicial decisions on the inclusion of packing charges in the assessable value of cement.

Analysis:
1. The case involved a dispute over the inclusion of packing charges in the assessable value of superfine cement. The Appellant argued that the cement in question was not different from ordinary grey portland cement and should be eligible for concessions similar to grey portland cement. They contended that since they had sold some consignments without packing, packing charges should not be included in the assessable value. The Appellate Collector had ruled in favor of including packing charges based on the nature of superfine cement being sold in a packed condition historically.

2. The Tribunal referred to the decision of the Hon'ble Supreme Court in the case of Union of India v. Bombay Tyre International Ltd. regarding primary packing. The Tribunal emphasized that the cost of primary packing, which makes the excisable goods marketable for the ordinary consumer, must be included in the assessable value. They noted that the Appellant had acknowledged the necessity of packing for cement in their letters, indicating that primary packing was essential for the sale of cement to consumers. Therefore, the Tribunal upheld the Appellate Collector's decision to include packing charges in the assessable value.

3. The Editor's Comments highlighted a conflicting decision by the Madhya Pradesh High Court in a separate case regarding the inclusion of packing charges for cement in gunny bags. The High Court had held that the cost of packing in durable and returnable gunny bags should not be included in the assessable value. The Editor suggested that this aspect was not argued before the Tribunal in the present case, indicating a potential different outcome if this argument had been presented. However, the Tribunal based its decision on the Supreme Court's ruling on primary packing costs, emphasizing the necessity of including such costs in the assessable value.

In conclusion, the Tribunal dismissed the Appeal, affirming the inclusion of packing charges in the assessable value of superfine cement based on the principles of primary packing costs outlined in the Central Excises and Salt Act.