9911796707
TMI Blog1995 (2) TMI 226X X X X Extracts X X X X X X X X Extracts X X X X ..... re packed, at the time of their removal from the factory. The contention of the Revenue is that the capsul was fitted on the KOT containers over the lid as an additional fitment, and did not form part of the metal containers, and that its cost was includible in the assessable value of the biscuits. On the other hand, the assessee had pleaded that the capsul was part of the KOT containers, and that its cost could not be added to the assessable value of the biscuits. 2. The appellants had taken up the matter with the Hon ble Bombay High Court who under their order dated 16-6-1994 had directed the Tribunal to dispose of the appeal within six months from that date. It appears that the appellants did not inform the Tribunal of this decision of the Hon ble High Court. The revenue had written on the matter but had initially given a wrong appeal number, and it was only on 12-8-1994 that the correct appeal number was known by the Tribunal alongwith the observations of the Hon ble High Court with regard to the present matter. In their memo of appeal as per Form No. EA 3 under Rule 216(1) of the Central Excise Rules, 1944, the appellants have stated against Column 8 of the said form of appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts. He also referred to the Tribunal s decision in the case of Col Tubes v. CCE, 1994 (72) E.L.T. 342 in which the Tribunal had held that the value of the cap was not includible in the value of the collapsible tube. 5. In rejoinder the Ld. Advocate stated that the notification was for exclusion of the cost of the metal container in which the goods were packed at the time of removal. The capsule is fitted on the tin at the time of removal of the biscuits. He relied upon the Supreme Court s decision in the case of HMM Ltd. v. CCE, 1994 (74) E.L.T. 19 (S.C.), and pleaded for the acceptance of the appeal. 6. We have carefully considered the matter. The appellants are engaged in the manufacture of biscuits, falling under Item No. IC of the erstwhile First Schedule to the Central Excises and Salt Act, 1944 (hereinafter referred to as the `Tariff ). The biscuits were delivered at the time of removal in a packed condition; a number of packets were kept in the KOT container. Under Section 4(4)(d) of the Central Excises and Salt Act, 1944 (hereinafter referred to as the `Act ), `Value in relation to any excisable goods where the goods are delivered at the time of removal in a packed con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld not be considered as an additional fitment. 8. The biscuits were ordinarily sold by the assessee to the buyers in the course of wholesale trade and delivered at the time of removal from the factory, packed in the metal container i.e. KOT container, duly fitted with the capsul. In the case of Star Paper Mills Ltd. v. CCE, 1989 (43) E.L.T. 178 (S.C.) the Hon ble Supreme Court had observed in para 12 of their judgment as under :- 12. In view of the foregoing discussion, we are of the opinion that use of paper core is necessary for rewinding of paper if it is delivered to the customer in rolls and would come within the purview of the expression any process incidental or ancillary to the completion of a manufactured product" used in the definition of the term manufacture in Section 2(f) of the Act and for the same reason paper core would also be constituent part of paper and would thus fall within the term component parts used in the Notification insofar as manufacture of paper in rolls is concerned. Paper core, however, cannot be said to be used in the manufacture of paper in sheets as component part. We are conscious that the relevant tariff item uses the word pape ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... racted above. Literally exemption is freedom from liability, tax or duty. Fiscally it may assume varying shapes, specially, in a growing economy. For instance tax holiday to new units, concessional rate of tax to goods or persons for limited period or with the specific objective etc. That is why its construction, unlike charging provision, has to be tested on different touchstone. In fact an exemption provision is like an exception and on normal principle of construction or interpretation of statutes it is construed strictly either because of legislative intention or on economic justification of inequitable burden or progressive approach of fiscal provisions intended to augment state revenue. But once exception or exemption becomes applicable no rule or principle requires it to be construed strictly. Truly speaking, liberal and strict construction of an exemption provision are to be invoked at different stages of interpreting it. When the question is whether a subject falls in the notification or in the exemption clause then it being in nature of exception is to be construed strictly and against the subject but once ambiguity or doubt about applicability is lifted and the subject f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s (USA) Container. A large box for intermodal transport, containing many smaller boxes of different shapes and sizes as well as individual articles. (Abstract from Glossary of Packaging Terms (Australia) [taken from Supreme Court decision at 1991 (52) E.L.T. 341 (SC) Para 8] 11. In the case of Kosan Metal Products Pvt. Ltd. v. Union of India, 1981 (8) E.L.T. 725 (Bombay), the goods involved were Gas cylinders, and the issue concerned the inclusion of the price of the valve in the assessable value of the gas cylinders. The facts in that case were different. Similarly, in the case of Asea Brown Boveri v. CC, Bangalore, 1994 (73) E.L.T. 219 (Tri.) = 1994 (54) ECR 394 (Tribunal), the matter related to the capacitance bridge which was an independent testing instrument. The facts before us are entirely different, and we do not consider that the ratio of that decision is applicable to the facts of this case. 12. Taking all the relevant considerations into account, we are of the view that the cost of the capsul forms parts of the cost of the KOT container, and that the cost of the KOT container (inclusive of the cost of the capsul), is eligible for exclusion from the value of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
