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TMI Blog1977 (1) TMI 45X X X X Extracts X X X X X X X X Extracts X X X X ..... tioner is common in these three petitions. It is a public limited company engaged in manufacture, inter alia , of dry cell batteries. While approving the wholesale price list of the petitioner, the Assistant Collector had accepted the claim of the petitioner that the cost of packing materials in which dry cell batteries are packed, should be excluded in determining the assessable value of those goods for levy of excise duty. But, later he initiated proceedings under Rule 10 of the Central Excise Rules, 1944, to recover extra excise duty representing the cost of packing dry cell batteries and raised additional demands on the petitioner. His decision was affirmed by the Deputy Collector, Central Excise, Allahabad, and the Appellate Collector ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er-affidavit filed on behalf of the Central Excise authorities, the case of the authorities is briefly as follows : Excise duty is not levied on the cost of manufacturing only. On completion of manufacturing processes, the goods do not become marketable until they are in a packed form. Hence the cost of packing should be included in the price at which the goods are sold in the wholesale market. The packing preserves the dry cell batteries and make them marketable. They are sold in the wholesale market only in a properly packed form and not in a loose form. The assessable value of goods for the purpose of levy of central excise duty is the price charged by the manufacturers for the sale of goods in wholesale market. We shall now set out the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of being sold at the time of the removal of the article chargeable with duty from the factory or any other premises of manufacture or production, for delivery at the place of manufacture or production, or if a wholesale market does not exist for such article at such place, at the nearest place where such market exists, or the price at which an article of the like kind and quality is sold or is capable of being sold by the manufacturer or producer or his agent, at the time of the removal of the article chargeable with duty from such factory or other premises for delivery at the place of manufacture or production or such article is not sold or is not capable of being sold at such place, at any other place nearest thereto. "Explanati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assistant Collector of Central Excise - 1978, E.L T. (J 444)-AIR 1975 S.C. 960, Bhagwati J. who spoke for the Court, after referring to elucidation of the value of excisable goods in A.K. Roy v. Voltas Ltd .= 1977, E.L.T. (J 177)=AIR 1973 S.C. 225, said thus: "The value of goods for the purpose of excise must take into account only the manufacturing cost and the manufacturing profit and it must not be loaded with post-manufacturing cost or profit arising from post-manufacturing operations." Shri M.A. Ansari, learned counsel for the petitioner, contended that the manufacturer of dry cell batteries cannot be said to be incomplete until they are packed in card board boxes or cartons and such boxes or cartons are again packed in woode ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... one as a matter of convenience and to facilitate the delivery and removal of a product from the factory gate ....... The glass and glassware manufactured by the petitioners in this petition could just as well be taken delivery of in the buyer's own packing materials like baskets or boxes or even vehicles........." 10 . In my view, the method or manner of marketing or delivery or transporting excisable goods which have been fully manufactured can never itself determine the assessable value of such excisable goods under Section 4 of the Act. Once it can be said that the manufacture of the excisable goods is complete, before they are packed, then that would be the end of the matter. The above observation of their Lordships of Mahara ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roughout the country. As stated earlier, two High Courts have interpreted the charging provisions of this Act in a manner favourable to the subject and them is no contrary interpretation by any other High Court. As that interpretation cannot be said to be unreasonable, we think we should follow it especially when this question is no longer of continuing importance on account of substitution of Section 4 by a new Section which expressly provides what category of packing charges should be included in determining the assessable value of articles for purposes of levy of excise duty. In the result, we allow these petitions and quash the additional demand for excise duty made on the petitioner company towards the value of packing charges of dry c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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