9911796707
TMI Blog1998 (11) TMI 334X X X X Extracts X X X X X X X X Extracts X X X X ..... the appropriate rate and cost of straw wrappings. The price is ex-factory price on cash sale basis." From 1975 onwards, the appellants were issued show cause notices raising demand of duty on the ground that packing charges realised by them from their customers on account of packing of the bottles in gunny bags and cartons form part and parcel of the assessable value. This allegation of the Department was challenged by the appellants and the show cause notices were subsequently dropped by the Assistant Collector of Central Excise vide his order dated 9-9-1981. It was observed in the said order that gunny bags and cartons are durable and returnable and are used as secondary packing by the appellants and as such cannot be included in the assessable value of the product in terms of Section 4(4)(d)(i) of the Act. The packing expenses of the goods with straw were directed to be charged to duty since it forms initial packing expenses. The said order of the Assistant Collector was accepted by the appellants as well as by the Revenue. 2.2. From the year 1982 onwards, further 13 show cause notices were issued to the appellants on the same ground and decided by the Assistant Collector ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er, the same was confirmed by the Commissioner (Appeals), Central Excise. 3. Arguing on behalf of the appellants, Shri D. Roy, ld. Advocate submitted that their goods are themselves packing material for other consumer goods and are capable of being sold in naked condition without any packing. Primary packing in the form of straw packing/linen is provided by them the value of which is to be added in the assessable value. The bottles are packed in gunny bags or carton boxes for safe transport at the instance of the buyers and the secondary packing material is durable and returnable in nature and as such, the cost of the same is not to be added in the assessable value of the goods. To stress upon the durable and returnable character of the bags, attention was drawn by the appellants to the various letters attached with the memo. of appeal, written by the appellants to their customer proposing to receive back the used and second-hand carton or bags and refunding the cost of the same in due course. It was further contended that the Commissioner (Appeals) has not applied his brain to the facts of their case and has simply relied upon his earlier order-in-appeal passed in the case o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tional Glass & Industries Ltd. holding that actual return of used and old carton boxes were not shown by the appellants. Such findings on the basis of decision given in another case, which is dependent upon facts of each and every case, was not justified on the part of the Commissioner (Appeals). As the carton boxes are durable and returnable, their cost cannot be included in the value of the glass bottles. 4. Countering the arguments, ld. JDR Shri R.K. Roy submitted that reliance by the Commissioner (Appeals) on his earlier order passed in the case of Hindustan National Glass & Industries is fully justified inasmuch as both the parties are manufacturing the same goods that is glass bottles. As such no grievance can be made by the appellants for relying upon the decision of another manufacturer similarly situate. As regards the merits of the case, Shri Roy submitted that this is the only packing being provided by the appellants. As such the same cannot be called as secondary packing. As regards the durability and returnability of the cartons, he submitted that the appellants have failed to produce on record any evidence showing the actual return of the carton boxes. The appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... down the test for including that packing "as whether such packing was necessary for putting the excisable article in the condition in which it is generally sold in the wholesale market at the factory gate." In the instant case, bottles in some cases were being cleared in the gunny bags the finding of which was given by the Assistant Collector vide his order dated 30-12-1985 and in some cases, the goods were being cleared in carton boxes. As such it becomes evident that there was no minimum uniform type of packing required for the bottles to be delivered at the factory gate in the course of wholesale trade to their wholesale buyers. However, we find that all these decisions were not considered by the lower appellate authority and he has simply disposed of the appeals by relying upon his earlier order in the case of Hindustan National Glass & Industries Ltd., Calcutta. We also take note of the fact that the appellants have taken a stand from the beginning that carton boxes are durable and returnable in nature. `Returnable' is dependent where there is an agreement between the buyers and the seller for return of such packing material and is not depending upon `actual return' of the pa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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