2006 (4) TMI 10 - AT - Central Excise

Central Excise Valuation - IC Engine (1) Secondary packing (2) Wooden crates (3) Protest (4) Limitation (5) Refund

Summary

Issues:
- Inclusion of cost of secondary packing in assessable value
- Refund claim of duty paid under protest

Analysis:
- The appeals involved the issue of whether the cost of secondary packing, specifically wooden packing, should be included in the assessable value of Diesel Oil Engines sold by the appellants. The Deputy Commissioner relied on previous decisions to argue that since a majority of sales were in wooden packing, it was necessary for putting the goods in a marketable state. However, the appellants contended that the goods were ordinarily sold in polythene packing at the factory gate, with wooden packing used only for outstation buyers.

- The appellants cited various decisions to support their argument, emphasizing that the cost of secondary packing should only be included if necessary for making the goods marketable. They also claimed a refund of duty paid under protest for the cost of wooden packing, which was rejected on both merits and grounds of limitation. The learned advocate for the appellants argued that the refund should be granted as the cost of secondary packing was not includible in the assessable value.

- The Tribunal considered the Supreme Court's observations on including packing costs in the assessable value, emphasizing that only packing necessary for making goods marketable should be included. In this case, it was found that the goods were primarily sold in polythene packing at the factory gate, with wooden packing used for outstation buyers. The statement of the partners, initially supporting wooden packing, was later modified to acknowledge that a significant portion of sales were without wooden packing.

- The Tribunal concluded that the cost of wooden packing should not be included in the assessable value, as the goods were ordinarily sold in polythene packing at the factory gate. Consequently, the refund claim of duty paid under protest was deemed admissible on merits, and the limitation argument was dismissed as the duty was considered paid under protest despite a lack of detailed representation.

- The appeals were allowed, and the judgment was pronounced on 25.04.2006, resolving the issues related to the inclusion of the cost of secondary packing in the assessable value and the refund claim of duty paid under protest in favor of the appellants.