1984 (8) TMI 346 - AT - Central Excise

Summary

Issues:
Whether the value of straw packing for china and porcelain goods should be included in their assessable value.

Detailed Analysis:

Issue 1: Inclusion of Straw Packing in Assessable Value
The central issue in this case is whether the value of straw packing for china and porcelain goods should be considered in their assessable value, especially when the packing is provided upon request only and not as a standard practice. The Respondent argued that since they primarily sell the goods loose in wholesale and provide straw packing only upon special request, the cost of such packing should not be included in the assessable value. However, the Revenue contended that as per Section 4(4)(d)(i) of the Act, the cost of packing should be included in the assessable value, particularly for goods like china and porcelain that are normally sold packed to prevent breakage in wholesale trade.

Issue 2: Interpretation of Relevant Legal Provisions
The Tribunal analyzed the provisions of Section 4(4)(d)(i) of the Act, which explicitly state that the cost of packing should be included in the assessable value. The Tribunal referred to previous decisions, including one by the Hon'ble Supreme Court, which emphasized that the cost of packing in which goods are ordinarily sold in wholesale trade must be considered for inclusion in the assessable value, regardless of whether the goods are actually sold with such packing in individual transactions.

Issue 3: Application of Legal Precedents
The Tribunal relied on the Supreme Court's decision and its own previous ruling in a similar case involving Panyam Cements to establish that the cost of packing must be included in the assessable value based on the usual course of sales in wholesale trade. The Tribunal emphasized that the ordinary practice of selling goods in a packed condition to wholesale buyers is the determining factor for including the value of packing in the assessable value, irrespective of the actual sales in loose conditions.

Conclusion
After considering the arguments and legal precedents, the Tribunal held that the value of packing for china and porcelain goods must be included in the assessable value as per Section 4(4)(d)(i) of the Act. The Tribunal overturned the Collector (Appeals) order and restored the adjudication order, stating that the Appellant is entitled to consequential relief. The decision clarifies that the inclusion of packing cost is mandatory for goods ordinarily sold in wholesale trade in a packed condition, even if some sales are made without such packing upon request.