1988 (10) TMI 150 - AT - Central Excise

Summary

Issues:
1. Interpretation of Section 4(4)(d)(i) of the Central Excises and Salt Act, 1944 regarding the inclusion of the cost of secondary packing in the assessable value.
2. Determination of whether carton packing constitutes secondary packing and should be excluded from the assessable value.
3. Examination of the facts regarding the nature of packing used by the manufacturers and its relevance to the assessable value determination.

Analysis:

Issue 1: The case involved the interpretation of Section 4(4)(d)(i) of the Central Excises and Salt Act, 1944 concerning the inclusion of the cost of secondary packing in the assessable value. The Appellate Collector held that the cost of secondary packing cannot constitute part of the assessable value based on certain High Court verdicts and previous judgments.

Issue 2: The main contention was whether carton packing used by the manufacturers constituted secondary packing and should be excluded from the assessable value. The Appellate Collector determined that corrugated board carton was secondary packing and its cost should not be included in the assessable value. However, the Government of India sought revision, arguing that the carton packing should be included in the assessable value.

Issue 3: The facts regarding the nature of the packing used by the manufacturers were not clear. The lower authorities did not have detailed information about the packing, specifically the presence of inner polythene packing. The Appellate Collector did not verify these facts or conduct an inquiry regarding the nature of the packing.

The Tribunal observed that the law on the inclusion of the cost of secondary packing had been clarified by recent judgments, which were not available to the lower authorities at the time of the decision. The Tribunal emphasized the importance of examining the nature of the packing in each case to determine its impact on the assessable value.

Ultimately, the Tribunal set aside the order of the Appellate Collector and remanded the matter for a fresh decision by the lower authority. It was deemed necessary for the original authority to thoroughly investigate all relevant facts and provide an opportunity for the manufacturers to present their case regarding the nature of the packing used and its relevance to the assessable value determination.