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TMI Blog1989 (3) TMI 263X X X X Extracts X X X X X X X X Extracts X X X X ..... dditional Duties of Excise (Goods of Special Importance) Act, 1957 (58 of 1957), the Central Govt. hereby exempts chewing tobacco of the description specified in column (1) of the Table hereto annexed and falling under sub-item 11(5) of Item No. 4 of the First Schedule to the Central Excises and Salt Act, 1944 (1 of 1944), from so much of the duty of excise leviable thereon both under the Central Excises and Salt Act, 1944 (1 of 1944) and the Additional Duties of Excise (Goods of Special Importance) Act, 1957 (58 of 1957), as is in excess of the duty specified in the corresponding entry in column (2) thereof. THE TABLE Description Rate of Duty (1) (2) Chewing tobacco of which the value per one kilogram (i) does not exceed rupees ten Fifteen per cent. ad valorem (ii) exceeds rupees ten Twenty-five per cent. ad valorem 2. The respondents in the price list No. 1/80 filed by them excluded the cost of wrappers, papers, printed packets warehousing and clearance charges and forwarding charges for arriving at the assessable value. The Asstt. Collector disallowed the exclusion as claimed. The Collector how ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellant s producing evidence to the effect that these constituted special secondary packing at the instance of the buyers. Discounts granted to the buyers also will have to be permitted deduction. There is considerable force also in the Appellant s plea that while fixing the value it has to bear some relation with regard to the weight of the goods and that to bear some relation with regard to the weight of the goods and that if it is made on gross it should include the total value or if it is on the nett is should be only on the weight of the tobacco before packing, putting perfume, etc. 3. The respondents have also filed a cross objection in this appeal and pleaded for allowing of the Dharmada charges for abatement from the gross sale price for arriving at the value of the tobacco. 4. We observe from the record that there was delay in filing of the cross objection. The application for condonation of delay in filing the cross-objection was dismissed vide Tribunal s Order No. Misc. 13/88-A, dated 1-3-1988 as the application was not properly signed. We also find from the record that when the matter was heard on 1-3-1988 by the Bench as constituted on that date, the learned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 2(f) the putting of chewing tobacco in the packs has been defined as a process of manufacture. He pleaded that the charge of duty is created when the tobacco is put in the packs bearing a brand name and that there is no question of taking the net weight of the tobacco as the nexus of the value has to be with the dutiable item. He pleaded, since the chewing tobacco has necessarily to be packed in primary packs first for it to be considered dutiable and in view of the fact that tobacco in packets gets spoilt, for the purpose of putting these in market stream, these packets have to be put in cartons which in turn have to be put in gunny bags which are wrapped in polythene cover, the value of tobacco, he pleaded, should be arrived at by adopting the price charged for the package, divided by the gross weight of the package including the weight of the gunny packs, etc. He pleaded since the value is not defined in the notification in terms of Section 20 of the General Clauses Act, the value as given in the statutes should be taken as the value for the purpose of the notification. He pleaded that the value including the cost of the packing, under the law is the value of tobacco for Sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 4. 12. Following with respect the ratio of the decision of the Hon ble Supreme Court, we hold that so far as the value of tobacco for the purpose of Notification 35/79 is concerned, the basis of the same will have to be the value as set out under Section 4. Having said that, the next question to be considered is how to arrive at the value of tobacco per kg. when the consignment is moving with all the packing materials which according to the learned advocate for the appellants is essential for putting the goods in the market stream and in respect of which there is no contradiction from the department in this regard. 13. We observe that in the case before the Hon ble Supreme Court, the question was determination of the value when the sale price was cum duty price and the question was whether the component of duty and discount could be abated from the sale price for the purpose of arriving at the value of the goods for notification purposes. The Hon ble Supreme Court affirmed that these abatements were to be allowed in terms of Section 4. The issue before us is determination of the value per kg. of the branded chewing tobacco and whether for this purpose the cost of the packing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... method the notification can be given effect to in a rational manner. The method suggested by both the sides, as pointed out above, would yield to anomalous results. As mentioned earlier inasmuch as in respect of forwarding charges and Dharmada, the respondents cross-objection has been dismissed earlier, the said charges will have to be included for the purposes of arriving at the value of the tobacco for notification purposes as set out above. 16. We clarify that after the rate of duty has been fixed depending upon the value per kg. of the branded chewing tobacco on the basis above, the assessable value of the goods will be the value including the cost of the packaging material, etc., and other charges as above subject to the deductions allowable under Section 4. 17. The appeal is, thus, allowed partially in the above terms. 18. [Order per: V.P. Gulati, Member (T)]. - This is an appeal fixed by Collector of Central Excise, Kanpur against the order of Collector of Central Excise (Appeals), New Delhi. The brief facts of the case are that the appellants manufacture branded chewing tobacco and filed a price list No. 2/80, dated 5-7-1980 claiming certain deductions from the price ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, 1944 has been duly settled by the decision of the Hon ble Supreme Court in the writ appeal filed by the Union of India and Others against Bombay Tyres International Ltd and Others. The court has laid down the categories of charges in respect of which deduction from the computation of the assessable value is permitted and these include duties, taxes, octroi, freight, insurance on freight, trade discount and special secondary packing put in at the instance of the buyer. As such the deductions claimed by the appellants towards post manufacturing expenses like advertisement, sales promotion charges, etc., cannot be permitted. However, deduction of freight, insurance, etc., should be correctly permitted. The Supreme Court has held the cost of primary packing and the secondary packing in which the goods are marketed should be included in the assessable value. In respect of the packing observe that the unit packing in smaller packages which are kept in an outer cover would be considered as the normal packing in which the goods are offered for whose sale trade and the value thereof cannot be excluded but the gunny packing in which the outer covers are placed can be considered as an ou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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