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TMI Blog1976 (12) TMI 184X X X X Extracts X X X X X X X X Extracts X X X X ..... ct, was the Assistant Collector justified in including the cost of packing which was incurred by the customers in the value of the metal containers under Section 4(1)(a) of the Central Excises and Salt Act, 1944 as amended. According to the appellants this notional addition to the cost of packing of cartons incurred by the customers for computing the assessable value of the metal containers manufactured by the appellants is not lawful. The following are the pleas in support of the above prayer : (1) The definition of the term `value as given in Section 4(4)(d) of the Central Excises and Salt Act, 1944 when read into is capable of being interpreted to make that where excisable goods are delivered in a packed condition, the value of such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , and the Rules made thereunder deal with levy of excise duty on goods manufactured and the cost of packing mentioned in Section 4(4)(d) has necessary to be interpreted to mean cost incurred by the manufacturers in packing the goods manufactured by him. The said section deals with packing, which is the property of the assessee manufacturer provided at his own cost and the same cannot be extended to packing provided by customers or the buyer. An interpretation to the contrary would lead to imposition of excise duty on goods entirely unconnected with the manufacturing activity of the assessee, which runs contrary to the basic concept of imposition of excise duty and consequently to illegal levy. (4) The appellants are in the position of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Central Excises and Salt Act, 1944. If product is not liable to excise duty in terms of Section 3 of the Act, the provisions of Section 4, which is a machinery section should not be construed to mitigate against it. 2. I have considered all the above submissions and have carefully gone through the reasoning adopted by the Assistant Collector for holding that the value of the cardboard cartons supplied by the customers for packing of metal containers should be included in the assessable value of the subject goods. In order to reach a decision it is first necessary to sum-up the admitted facts, which are as below :- (i) The cardboard cartons are supplied by the buyers, who in this case are Food Speclalities Ltd. The cost of the carton ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... serve that the cost of packing which should be included in the value of the goods delivered in packed condition can only refer to include cost to the manufacturer, who is the assessee. In other words the cost of packing mentioned in Section 4(4)(d) should be interpreted to mean cost incurred by the manufacturer in packing the goods manufactured by him. The above interpretation is supported by the fact that the exemption under Section 4(4)(d) is applicable to packing of a durable nature, which is returnable by the buyer to the assessee. It also appears that since the cardboard packing is supplied by Food Specialities Ltd., the cardboard packing is done for the benefit of the Food Specialities and at their instance and cost. Metal containers ..... X X X X Extracts X X X X X X X X Extracts X X X X
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