1987 (7) TMI 260 - AT - Central Excise

Summary

Issues:
- Inclusion of carton cost in the assessable value of glass bottles sold by the assessee.
- Determination of the rate at which the carton cost should be included.

Analysis:
1. The judgment involved seven matters with common issues regarding the inclusion of carton cost in the assessable value of glass bottles sold by the assessee to a customer. The assessee supplied empty glass bottles in cartons provided by the customer, and the dispute centered around the interpretation of Section 4(4)(d)(i) of the Central Excises and Salt Act, 1944.

2. The assessee contended that since the cartons were provided free of cost by the customer and were used solely for transportation purposes, no cost of packing should be included in the assessable value. They argued that the glass bottles could be supplied without any packing and cited previous judgments to support their case.

3. On the other hand, the department argued that Section 4(4)(d)(i) did not differentiate between packing belonging to the customer or the assessee. They asserted that packing was essential for the protection of fragile glass bottles and relied on the Supreme Court judgment in a similar case. The department also highlighted the lack of evidence regarding the repeated use of the same carton for multiple dispatches.

4. The Tribunal considered the need for uniformity in valuation and assessment to prevent discrimination among manufacturers of similar goods. They noted that previous High Court judgments involving identical goods and customers supported the assessee's position. As there was no contrary judgment, the Tribunal followed the Karnataka High Court's ruling, holding that the cost of the customer's carton should not be included in the assessable value.

5. Consequently, the Tribunal dismissed the department's appeals and allowed the cross-objections of the assessee, ruling that the cost of the customer's carton should not be added to the assessable value of the glass bottles. The Tribunal directed that consequential relief be granted to the assessee and acknowledged the need for reassessment if the retained portion of duties on packing cost was to be considered as part of the price realization.