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TMI Blog2003 (8) TMI 377X X X X Extracts X X X X X X X X Extracts X X X X ..... scount for damages in transit. (ii) Cost of durable and returnable packaging (HDPE bags). (iii) Bank charges for collection of sale proceeds. (iv) Post removal handling expenses. (v) C FA remuneration. (vi) Interest on finished goods in stock. After the Apex Court s decision in the case of MRF, the assessee decided to voluntarily surrender abatements claimed on issues at Sl. Nos. (iv), (v) and (vi) above, and did not contest denial of the same. In respect of the denial of deductions on account of Sl. Nos. (i), (ii) and (iii) above, they preferred an appeal to the Commissioner (Appeals). The Commissioner (Appeals) vide his order now impugned, allowed the appeal, in respect of the bank charges and discount fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 710; Mahalaxmi Glass Works Pvt. Ltd. - 1988 (36) E.L.T. 727; C.C.E. v. EID Parry (I) Ltd. - 1989 (40) E.L.T. 139; Maharashtra Vegetable Products v. CCE - 1992 (57) E.L.T. 173 (T); Wipro Products v. U.O.I. - 1991 (51) E.L.T. 281 (Bom.), the appellants submit that the Commissioner (Appeal) s order was incorrect and not as per the law and since the Wheel Detergent was sold with a categorical stipulation, as mentioned above, an option was available with the buyer to return the re-usable HDPE bags, they were, therefore, entitled to abatement of cost to determine the values, as per Section 4 of the Central Excise Act, 1944 as it then existed. They also contend that this stipulation on the sales invoice was an arrangement satisfying the stipulat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dustan Lever Limited, being the successors in interest are prosecuting this appeal in their name. (b) In order to substantiate the contention, that at the material point of time, M/s. Stephan Chemicals Limited was an independent entity which was engaged in the manufacture and sale of Wheel detergent powder, sample copies of the invoices for the relevant period were enclosed. These invoices do bear the endorsement as recorded in para 2, herein above. (c) Section 4(4)(d)(i), specifically includes cost of packing, except if it is of durable nature and it is returnable by the buyer to the assessee. The context in which the word returnable is used and is preceded by the word is , positively indicates that there has to be a term in the con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rned which is the determining factor. The packing must be returnable by the buyer and that must be under an arrangement between the buyer and the assessee. 6. While interpreting a contract, Courts were just as strict about the written words used in the deeds as they were interpreting a Statute or a Will. They had refused to look at external aids and went by grammatical meanings, no gaps were required to be filled. This, earlier view of interpretation, was later on relaxed when consumer protection movements developed and buyers were sought to be protected. The Courts started filling up the gaps leading to the development of doctrine of implied terms . The phrase implied terms was to be meant in fact or in law was the question. The t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned, no doubt the Indian Institute of Packaging has certified that the HDPE bags can be reused for 2 to 6 times. But the nature of durable and returnable packing should also be established by practice of receiving back and reused. But the law does not stipulate that in all the cases it should be returned. At the same time, the benefit of exemption also cannot be extended merely because he has made a mention that the packing cost would be refunded if returned. Also the appellants have not established with evidence in a few sample cases even where in they have actually refunded the cost of packing. Under the above circumstances these packing cannot be held as durable and returnable packing since the appellants have not established that it i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e packing, which sufficed to characterize it as durable and returnable packing in terms of the wording of Section 4. He also relied upon the decision of the Supreme Court in the case of Mahalakshmi Glass Works (P) Ltd., reported in 1988 (36) E.L.T. 727 (SC) in the same context. The SDR for Revenue drew our attention to the recent decision of CEGAT, WRB, in the case of Ion Exchange Ltd. v. CCE, Mumbai, reported in 2003 (57) RLT 330, which has considered the above-cited case of Mahalakshmi Glass Works while upholding the order of the lower authorities that mere indication on the invoices that the packing material is durable and returnable does not constitute an agreement or arrangement between buyer and seller. She further said that the cas ..... X X X X Extracts X X X X X X X X Extracts X X X X
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