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Dispute over inclusion of cost of packing in the value for charging excise duty on cement under section 4(4)(d)(i) of the Central Excises and Salt Act, 1944. Analysis: 1. The judgment pertains to a dispute regarding the inclusion of the cost of packing in the value for charging excise duty on cement under section 4(4)(d)(i) of the Central Excises and Salt Act, 1944. The petitioners, manufacturers of portland cement, contested that the cost of packing should not be included in the value for excise duty purposes. 2. The court examined the relevant provisions of the Act, particularly section 4(4)(d)(i), which states that the cost of packing is included in the value of excisable goods unless the packing is of a durable nature and returnable by the buyer to the assessee. The exemption from including the cost of packing came into effect from 9th January 1976 for grey portland cement. 3. The petitioners argued that the provision requiring the inclusion of packing cost in the value for excise duty was ultra vires as packing is not part of the manufacturing process. However, the court focused on whether the packing met the exception criteria of being durable and returnable by the buyer. 4. The court analyzed the evidence presented, including government orders, circulars, and invoices, which demonstrated that the cement bags were of a durable nature and returnable by the buyer. The court highlighted that the key factor was the returnability of the packing, not the actual return of the packing material. 5. The court found that the petitioners satisfied the conditions of the exception under section 4(4)(d)(i) as the packing was durable and returnable by the buyer, as per the terms set by the Cement Control Order and other directives. The court rejected the reasoning of the Assistant Collector that the return of packing material must be ascertained at the time of assessment. 6. Additionally, the court addressed the issue of refund of duty paid under protest by the petitioners. It held that if the petitioners were not liable to pay duty, they were entitled to a refund. The court dismissed the argument that the petitioners were not entitled to a refund, emphasizing that justice warranted the refund, especially since duty was paid under protest. 7. Ultimately, the court allowed the petitions, declaring that the cost of packing was not includible in the value of cement for excise duty purposes for the relevant period. The petitioners were granted refunds for the duty paid on the cost of packing, and any demands for such duty were quashed. The court ordered the refund of security amounts and made no ruling on costs for the petitions.
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