1996 (8) TMI 264 - AT - Central Excise

Summary

Issues:
1. Interpretation of Notification No. 34/83 regarding excise duty exemption for metal containers.
2. Application of Notification No. 175/86 on the value of clearances for biscuits packed in metal boxes.
3. Determination of the value of clearances under Section 4 of the Central Excises and Salt Act, 1944.
4. Consideration of the cost of metal containers in the value of excisable goods for duty calculation.

Analysis:
The appellant, engaged in biscuit manufacturing, utilized metal containers for packing a portion of the biscuits. The dispute arose concerning the duty exemption under Notification No. 34/83, which exempts duty on the value equivalent to the cost of metal containers. Additionally, the appellant benefited from Notification No. 175/86, which allowed duty-free clearances up to a specified limit. The issue was whether the value of metal containers should be included in calculating the duty-free clearances under Notification No. 175/86.

The Tribunal observed that Notification No. 34/83 does not exempt metal containers but only exempts duty equivalent to the excise duty on the value representing the cost of metal containers. The critical aspect was the interpretation of "value" under Notification No. 175/86, which referred to Section 4 of the Central Excises and Salt Act, 1944. The Tribunal highlighted that the value for the purpose of Notification 175/86 is determined in accordance with Section 4 of the Act.

Furthermore, the Tribunal analyzed Section 4(4)(d) of the Act, which includes the cost of packing in the value of goods unless the packing is of a durable nature and returnable by the buyer. The appellant failed to establish that the metal boxes were returnable, leading to the conclusion that the value of metal boxes should be included in the value of excisable goods for duty calculation.

Consequently, as the value of clearances exceeded the limit specified in Notification No. 175/86 due to the inclusion of the metal boxes' value, the appellant was not entitled to the duty exemption for clearances beyond the limit. The Tribunal upheld the demand for duty on the excess clearances and dismissed the appeal, finding no grounds for interference.