1990 (10) TMI 193 - AT - Central Excise

Summary

Issues:
Whether the cost of wooden crates used for packing Internal Combustion engines should be included in the value of the goods.

Detailed Analysis:

1. Appellants' Argument:
- The appellants argued that the wooden crates were solely for transportation purposes and not for sales function, citing precedents like Bombay Tyre International and Godfrey Philips India Ltd.
- They emphasized that only a small percentage of engines were actually sold, and the packing was essential for protecting the goods during transportation.

2. Revenue's Argument:
- The Revenue contended that there should be no distinction between transport and non-transport containers for valuation purposes under Section 4.
- They argued that wooden crates were primary packing and necessary for the nature of the product, citing the Supreme Court's decision in Ponds India Ltd.

3. Additional Arguments:
- The SDR highlighted the necessity of packing for safety and transportability, referencing a Tribunal judgment on the inclusion of packing costs for fans.
- The arguments continued with the appellants reiterating the reliance on Godfrey Philips for valuation principles.

4. Judgment Analysis:
- The Tribunal acknowledged that the engines were always packed in wooden crates for protection and transportation.
- Referring to Bombay Tyre International and subsequent Supreme Court judgments, the Tribunal emphasized that the packing in which goods are sold in wholesale trade should be included in value.
- The Tribunal noted the difficulty in directly applying previous judgments due to the unique packing method of engines but concluded that the principle of including packing in wholesale market applies.
- Considering that engines were always sold in crates and the purpose was protection and transportation, the Tribunal ruled in favor of including the cost of crates in the value of the goods.

5. Conclusion:
- The Tribunal dismissed the appeal, stating that based on the specific facts of the case and the applicable legal principles, the cost of wooden crates used for packing the engines should be included in the valuation of the goods.