1991 (12) TMI 152 - AT - Central Excise

Summary

Issues:
- Disallowance of deduction for special packing in determining assessable value under Section 4 of the Central Excises and Salt Act, 1944.
- Inclusion of cost of special packing provided for outstation dealers in assessable value.
- Interpretation of the necessity of secondary packing for assessable value determination.
- Applicability and interpretation of relevant case laws.

Detailed Analysis:

1. The appeal involved a dispute regarding the assessable value of water coolers, bottle coolers, and deep freezers manufactured by the respondents falling under Item No. 29A(1) of the Central Excises and Salt Act, 1944. The issue arose when the Assistant Collector disallowed the deduction of the cost of special packing provided at the request of outstation dealers for determining the assessable value of the goods under Section 4 of the Act.

2. The Appellate Collector allowed the appeal filed by the respondents, holding that only the cost of normal packing used for goods delivered to local dealers should be included in the assessable value, while the cost of any special packing provided at the request of outstation dealers should not be included. The appeal before the Appellate Tribunal was a result of the transfer of proceedings initiated by the Central Government under Section 36(2) of the Act.

3. The Revenue argued that the cost of packing necessary to make the goods marketable at the factory gate should be part of the assessable value, citing the decision of the Supreme Court in the case of CCE v. Ponds India Ltd. The Revenue suggested referring the matter to the Assistant Collector to determine the nature of packing required to sell the goods in the wholesale market.

4. The respondents, represented by the advocate, contended that as per the order passed by the Collector, only the cost of normal packing used for goods delivered locally should be included in the assessable value. They referred to relevant case laws to support their argument, emphasizing that the cost of special packing for outstation deliveries should not be part of the assessable value.

5. The Tribunal examined the case records and considered the arguments from both sides. Referring to the decision in Hindustan Lever Ltd. v. CCE, the Tribunal concluded that only the cost of secondary packing necessary to put the excisable article in the condition in which it is generally sold in the wholesale market should be included in the assessable value.

6. Since the appellants' products were available at the factory gate to all wholesale dealers without special packing, the Tribunal held that the cost of extra packing provided for outstation dealers did not form part of the assessable value of the goods. Based on this interpretation, the appeal was rejected.

This detailed analysis of the judgment highlights the key issues, arguments presented by both parties, relevant legal principles, and the Tribunal's decision based on the interpretation of the law and precedents cited.