2013 (12) TMI 693 - AT - Central Excise

Packing material supplied free of cost form part of assessable value or not Held that - When goods are traded in containers/packaged material and not separable from contents to make such goods marketable, assessable value of the same shall be determined as cleared without separating contents from containers Following Hindustan Polymers v. CCE 1989 (8) TMI 77 - SUPREME COURT OF INDIA relates to the period prior to 30th June, 2000 - Thereafter the value of packaging material is required to be included in the assessable value - This calls for re-computation of demand arising after 30th June, 2000 including packaging material Thus, the matter remanded back to the adjudicatory authority to recomputed the demand Decided partly in favour of Revenue.

Summary

Issues:
1. Interpretation of assessable value in relation to packaging material supplied free of cost by buyers.
2. Application of transaction value concept in Excise law.
3. Impact of judgments pre and post the enactment of transaction value concept on assessable value determination.

Analysis:
1. The judgment addresses the issue of assessable value in the context of packaging material supplied free of cost by buyers. The Commissioner (Appeals) had set aside the duty demand of Rs. 1,16,609/-, holding that such material should not form part of the assessable value. However, the learned DR argued that under the transaction value concept introduced in Excise law from 1-7-2000, when goods are traded in containers/packaged material inseparable from contents, the assessable value should include the value of the packaging material. The judgment highlights the difference brought by the enactment of transaction value, rendering the appellant unable to benefit from earlier judgments like Hindustan Polymers v. CCE, which applied to the period before 30th June 2000.

2. The Tribunal, in its decision, emphasizes the significance of the transaction value concept post its introduction in Excise law. It clarifies that when goods are traded in containers or packaged material that cannot be separated from the contents for marketability, the assessable value should consider the entire package. This directive aligns with the legislative intent behind incorporating the transaction value mechanism, ensuring a comprehensive assessment of the value of goods for excise duty purposes.

3. The judgment concludes by directing the matter back to the Adjudicating Authority for the re-computation of the demand, specifically including the value of packaging material in the assessable value post 30th June 2000. It modifies the order of the Commissioner (Appeals) to reflect this aspect, partially allowing the Revenue's appeal. This decision underscores the necessity of recalculating demands in light of the transaction value framework and the evolving jurisprudence surrounding the inclusion of packaging material in the assessable value post the statutory amendment.