9911796707
TMI Blog1984 (11) TMI 323X X X X Extracts X X X X X X X X Extracts X X X X ..... ine price lists during the year 1978-79 on different days before the Assistant Collector, Central Excise, Hyderabad, claiming deduction of what they said to be secondary packing expenses from the assessable value of the biscuits manufactured by them. M/s. Ampro Food Products filed a consolidated price list for the excisable products manufactured by them. for the year 1978-79 in Part I for determination of value under Section 4 of the Central Excises and Salt Act, 1944 (hereafter referred as the Act). In Column 9 of the said price list, against Sl. Nos. 1 to 24, the assessee showed certain amounts against the abbreviation S.P. which was claimed to mean secondary packing. The amount shown in Col. 10 against this alleged secondary packing represented the value of the material comprising corrugated board boxes or tins which formed the outer container within which smaller packets of biscuits are kept. In respect of Jivan Food Products also the cost of secondary packing claimed for deduction represented the cost of material comprising corrugated board boxes or tin containers forming the outer container within which similar packets of biscuits were kept. The Assistant Collector, Hyderab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 78 with other five varieties of biscuits mentioned in the price list dated 28-3-1978. If he finds that in respect of quality and packing the five varieties mentioned in the aforesaid three price lists are identical, then the deduction on account of cost of secondary packing should be allowed, for the reasons and in view of the circumstances recorded in the Order-in-Appeal No. 169/78, dated 3-10-1978. 4. It is these two orders in appeal which the Central Government sought to review and therefore issued notices under Section 36(2) of the Act. Both these matters were posted for hearing after 30th October, 1984. None was present on behalf of either party. Earlier too none was present when these appeals were posted. We, therefore, consider the matter on the basis of existing records which we perused in detail. We also heard Shri Mahesh Kumar, the learned representative for the appellants. 5. The facts of the case show that the issue involved here is whether or not the tin containers etc. in which the biscuits are packed constitute secondary packing or not. In somewhat identical replies to the notices issued by the Government in the course of review, the respondents argued that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re and is returnable by the buyer to the assessee. (The respondents were obviously referring to the durable nature and returnability mentioned in Section 4(4)(d)(i) of the Act. They relied on several judgments of the High Courts in support of their arguments. These judgments are as follows :- 1. Malwa Vanaspati and Chemical Co. Ltd., Indore v. Union of India (1979 E.L.T. 243). 2. Geep Flash Light Industries Ltd., Allahabad v. Union of India (1979 E.L.T. 391). 3. Alembic Glass Industries Ltd. v. Union of India and Others (1978 E.L.T. 444). 4. Indo-National Ltd. v. Union of India Others (1979 E.L.T. 334). 8. In sum, the respondents argument is that their goods (biscuits) were fully manufactured without packing and the cost of packing is neither manufacturing cost nor manufacturing profit on which excise duty can be levied. Further, even if reference is made to Section 4 of the Act only initial or primary packing can be included and not the secondary packing. As summed up by the respondents, primary packing in their case consisted of packing in polythene paper, etc. while secondary packing consisted of containers, corrugated boxes and paper wrappers. 9. Shri Mahes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... substantially changed since the respondents in these appeals submitted their replies to the Government s Show Cause Notices. This change has been the result of the judgment of the Supreme Court in the matter of Union of India and Ors. etc. v. Bombay Tyre International Ltd. etc. (1983 E.L.T. 1896). This judgment considered several aspects of Section 4 but insofar as the present appeals are concerned, paragraph 51 thereof is relevant. It is in .......It is relevant to note that the packing, of which the cost is included, is the packing in which the goods are wrapped, contained or wound when the goods are delivered at the time of removal. In other words, it is the packing in which it is ordinarily sold in the course of wholesale trade to the wholesale buyer. The degree of packing in which the excisable article is contained will vary from one class of articles to another. From the particulars detailed before us by the assesses, it is apparent that the cost of primary packing, that is to say, the packing in which the article is contained and in which it is made marketable for the ordinary consumer for example a tube of toothpaste or a bottle of tablets in a cardboard carton, or bisc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Therefore, such an argument would not be acceptable even if it were otherwise valid. The learned departmental representative also cited this Tribunal Order No. 375/84-A dated 6-6-1984 (M/s. Lucky Biscuits Co., Patna v. Collector of Central Excise, Patna), in support of his argument. In that matter, the appellants M/s. Lucky Biscuits Co. Ltd., argued that the cardboard cartons or wooden cases were returnable and hence their cost should not be included in the assessable value. It was also argued that the cost of large size tin containers, cartons or wooden cases described as secondary packing material should not be included in the assessable value. Dismissing the appeal the learned Bench referred to the Supreme Court judgment mentioned earlier and decided that this judgment gave a specific and direct authority for inclusion of such type of packing material which is in the nature of essential packing for a commodity like biscuits packed in loose form or in small packets which without the help of the secondary packing like large sized tin containers cannot obviously be marketed or dispatched from the factory gate. This judgment further strengthens our finding that the cost of second ..... X X X X Extracts X X X X X X X X Extracts X X X X
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