1986 (1) TMI 121 - HC - Central Excise

Summary

Issues:
Challenge to order rejecting refund application for excise duty paid on packing cost of tread rubber.

Analysis:
The petitioners manufactured tread rubber and paid excise duty including the packing cost. Upon learning that packing cost was to be excluded in excisable value, they applied for a refund. The 3rd respondent rejected the claim, stating that packing was necessary before delivery to customers, hence its cost should be included. The appellate and revision authorities upheld this decision, emphasizing the integral role of packing in selling the product.

The petitioners argued that the packing was more for customer service than protection, but the 2nd respondent upheld the rejection, citing the packed condition of the product upon clearance. In the revision application, it was contended that tread rubber could be delivered unpacked, but the 1st respondent rejected the claim due to lack of separate identification and invoicing of packing charges.

Referring to Supreme Court judgments, the petitioners' counsel argued that secondary packing for transport should not be included in assessable value. The judge examined the nature of the packing, observing that the cardboard cartons or wooden cases were essential for selling the tread rubber in wholesale trade, not merely for transport facilitation. The judge concluded that the packing materials were not secondary and upheld the rejection of the refund application.

The counsel requested a remand to consider the matter in light of Supreme Court decisions and a different view in another case. However, since the packing was deemed essential for selling the product and not merely for transport, the judge dismissed the petition, emphasizing the integral role of the packing materials in the sale of tread rubber.

In conclusion, the petition challenging the rejection of the refund application for excise duty paid on the packing cost of tread rubber was dismissed, with no order as to costs.