2001 (9) TMI 475 - AT - Central Excise

Summary

Issues:
Whether the cost of packing is includible in the assessable value of Motor Cycles.

Analysis:
The appeal, filed by the Revenue, raised the issue of whether the cost of packing should be included in the assessable value of Motor Cycles manufactured by a company. The Revenue argued that as per the Central Excise Act, the cost of packing should be included when goods are delivered in a packed condition. They cited previous court decisions to support their stance.

In response, the Advocate for the Respondent contended that packing is primarily for ensuring the safety of goods during transportation and not for making the goods marketable. They referred to a test laid down by the Supreme Court to determine the inclusion/exclusion of packing cost in the assessable value. The Advocate relied on various court decisions to support the argument that if packing is solely for transportation purposes and not necessary for selling goods in the wholesale market, the packing cost should be excluded.

The Tribunal considered both arguments and referred to the Supreme Court's test regarding the inclusion of packing cost in the assessable value. They noted that the Motor Cycles were removed from the factory to the Depot in a packed condition, indicating that the cost of packing should be included in the assessable value. The Tribunal distinguished the facts of previous cases cited by the Respondent's Advocate, emphasizing that in the present matter, the Motor Cycles were sold at the Depot. Therefore, the Tribunal concluded that all expenses, including packing costs, should be included in the assessable value, setting aside the previous decision and allowing the appeal filed by the Revenue.