2017 (12) TMI 277 - AT - Central Excise

Valuation - includibility - additional packing in wooden box/caret which was over and above the packing - Held that - additional packing is for safe transportation of goods otherwise for the packing of the goods the primary packing is sufficient - issue has been considered by the Hon ble Supreme Court in case of M.R.F. Ltd 1995 (5) TMI 28 - SUPREME COURT OF INDIA wherein it was held that cost of packing in which goods are ordinarily sold in the course whole sale trade to the wholesale buyer cost thereof alone is includible in the cost of packing incurred protecting the goods in transit is not includible - additional packing is provided only in few cases for the purpose safe transport therefore the additional packing is not includible in assessable value - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Whether the additional packing charges provided by the appellant are includible in the assessable value of the final product under the Central Excise Tariff Act, 1985.

Analysis:
The case involved the appellant engaged in the manufacture and clearance of PVC films, foils, sheets, etc., under specific chapters of the Central Excise Tariff Act, 1985, on behalf of a loan license. The appellant declared that the price list included normal packing costs, with additional packing costs and interest on delayed payments charged separately. The department issued a show cause notice demanding duty on the cost of additional packing charges for outstation customers. The original order confirmed the duty demand and imposed a penalty, leading the appellant to file an appeal before the Commissioner(Appeals), who upheld the original order, prompting the appeal to the tribunal.

The appellant argued that the cost of secondary packing, like wooden boxes for protecting goods during transportation, was not included in the normal price, making it non-assessable. They highlighted that the additional packing was optional and provided only for upcountry transportation in a limited number of cases. The appellant cited relevant judgments to support their position.

On the other hand, the Revenue contended that wooden boxes/crates constituted normal packing and should be included in the assessable value of the finished goods. They relied on a Supreme Court judgment to support their stance.

After considering both parties' submissions and examining the records, the tribunal found that the additional packing was provided in only a few cases for safe transportation, indicating it was not part of the assessable value. They referred to a Supreme Court judgment that clarified the inclusion of packing costs in the wholesale trade. The tribunal distinguished the Revenue's cited judgment involving delicate glass sheets, where wooden boxes were essential, from the present case. Consequently, the tribunal held that the additional packing provided by the appellant was not includible in the assessable value of the final product, overturning the impugned order and allowing the appeal.

The tribunal pronounced the judgment on 31/10/17.