9911796707
TMI Blog1983 (10) TMI 51X X X X Extracts X X X X X X X X Extracts X X X X ..... s that duties of excise shall be levied and collected on all excisable goods, other than salt, which are produced or manufactured in India, at the rates set forth in the First Schedule. We are not concerned with the provision relating to salt. Sub-section (2) empowers the Central Government to fix, for the purpose of levying the duties, tariff values of the articles enumerated in the First Schedule as chargeable with duty ad valorem. 4. Before its amendment by Act XXII of 1973 Section 4 read as follows : "4. Determination of value for the purposes of duty. - Where, under this Act, any article is chargeable with duty at a rate dependent on the value of the article, such value shall be deemed to be - (a) the wholesale cash price for which an article of the like kind and quality is sold or is capable 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 (b) Where such price is not ascertainable, the price at which an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goods are sold by the assessee in the course of wholesale trade for delivery at the time and place of removal at a price fixed under any law for the time being in force, or at a price, being the maximum fixed under any such law, then, notwithstanding anything contained in clause (iii) of this proviso the price or the maximum price, as the case may be, so fixed shall, in relation to the goods so sold, be deemed to be the normal price thereof; (iii) where the assessee so arranges that the goods are generally not sold by him in the course of wholesale trade except to or through a related person, the normal price of the goods sold by the assessee to or through such related person shall be deemed to be the price at which they are ordinarily sold by the related person in the course of wholesale trade at the time of removal, to dealers (not being related persons) or where such goods are not sold to such dealers, to dealers (being related persons) who sell such goods in retail; (b) where the normal price of such goods is not ascertainable for the reason that such goods are not sold or for any other reason, the nearest ascertainable equivalent thereof determined in such manner as may be p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uyers, who or which purchase their requirements otherwise than in retail." 6. In the case before us there has been considerable debate on the true meaning and scope of Section 4 before and after its amendment. The points raised are not without difficulty, but we have had the advantage of hearing counsel of eminence on both sides, and we are grateful to them for the considerable assistance they have given us throughout the hearing of these cases. 7. The central issue between the parties is whether the value of an article for the purposes of the excise levy must be determined by reference exclusively to the manufacturing cost and the manufacturing profit of the manufacturer or should be represented by the entire wholesale price charged by the manufacturer. The wholesale price actually charged by the manufacturer consists of not merely his manufacturing cost and his manufacturing profit but includes, in addition, a whole range of expenses and an element of profit (conveniently referred to as "post-manufacturing expenses" and "post-manufacturing profit") arising between the completion of the manufacturing process and the point of sale by the manufacturer. Mr. N.A. Palkhiwala, learne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rmal for the purposes of excise", that is to say, that the price must exclude post-manufacturing expenses and post-manufacturing profit and must not be loaded with any extraneous element. It is conceded, however, that under the new Section 4(1)(a) there is no attempt to preserve uniformity as regards the amount of duty between one manufacturer and another, but it is urged that the basis on which the value is determined is constituted by the same conceptual criterion, that post-manufacturing expenses and post-manufacturing profit must be excluded. Considerable emphasis has been laid on the submission that as excise duty is a tax on the manufacture or production of goods it must be a tax intimately linked with the manufacture or production of the excisable article and, therefore, it can be imposed only on the assessable value determined with reference to the excisable article at the stage of completed manufacture and to no point beyond. To preserve this intimate link or nexus between the nature of the tax and the assessment of the tax, it is urged that all extraneous elements included in the "value" in the nature of post-manufacturing expenses and post-manufacturing profits have to b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ......goods manufactured or produced in India". A duty of excise, according to the Federal Court in The Central Provinces and Berar Sales of Motor Spirit and Lubricants Taxation Act, 1938 - (1939) F.C.R. 18 = 1978 E.L.T. (J 269) is a duty ordinarily levied on the manufacturer or producer in respect of the manufacture or production of the commodity taxed. A distinction was drawn between the nature of the tax and the point at which it was collected, and Gwyer, C.J. observed that theoretically "there can be no reason why an excise duty should not be imposed even on the retail sale of an article, if the taxing Act so provides. Subject always to the legislative competence of the taxing authority, a duty on home-produced goods will obviously be imposed at the stage which the authority find to be the most convenient and the most lucrative, wherever it may be; but that is a matter of the machinery of collection, and does not affect the essential nature of the tax. The ultimate incidence of an excise duty, a typical indirect tax, must always be on the consumer, who pays as he consumes or expends; and it continues to be an excise duty, that is, a duty on home-produced or home-manufactured go ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the essence of the duty of excise, which is attracted by the manufacture itself." This Court had occasion to consider a similar question in R.C. Jall v. Union of India - (1962) Suppl. 3 SCR 436. In that case, the Central Government was authorised by an Ordinance to levy and collect as a cess on coal and coke despatched from collieries in British India a duty of excise at a specified rail. Rule 3 made under the Ordinance empowered the Government to impose a duty of excise on coal and coke when such coal and coke was despatched by rail from the collieries of the coke plants, and the duty was to be collected by the Railway Administration by means of a surcharge on freight either from the consignor or consignee. It was contended by the assessee that the excise duty could not legally be levied on the consignee who had nothing to do with the manufacture or production of coal. The Court remarked : "The argument confuses the incidence of taxation with the machinery provided for the collection thereof." and reference was made to In re : The Central Provinces and Berar Act No. XIV of 1938 (supra), The Province of Madras v. Boddu Paidanna and Sons (supra) and Governer-General in Council ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It has long been recognised that the measure employed for assessing a tax must not be confused with the nature of the tax. In Ralla Ram v. The Province of East Punjab - (1948) F.C.R. 207, the Federal Court held that a tax on buildings under Section 3 of the Punjab Urban Immovable Property Tax Act, 1940 measured by a percentage of the annual value of such buildings remained a tax on buildings under that Act even though the measure of annual value of a building was also adopted as a standard for determining income from property under the Income-tax Act. It was pointed out that although the same standard was adopted as a measure for the two levies, the levies remained separate and distinct imposts by virtue of their nature. In other words, the measure adopted could not be identified with the nature of the tax. The distinction was observed by a Special Bench of the Patna High Court in Atma Ram Budhia v. State of Bihar - AIR 1952 Patna 359, where a tax on passengers and goods assessed as a rate on the fares and freights payable by the owners of the motor vehicles. Atma Ram Budhia (supra) was referred to with approval by this Court in M/s. Sainik Motors, Jodhpur and Others v. The State o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... where the relationship was succinetly described thus :- "It may be, and is often so, that the tax on circumstances and property is levied on the basis of income which the assessee receives from his profession, trade, calling or property. That is, however, not conclusive on the nature of the tax. It is only as a matter of convenience that income is adopted as a yardstick or measure for assessing the tax. As pointed out In Re : A Reference under Govt. of Ireland Act (supra), the measure of the tax is not a true test of the nature of the tax. Therefore, while determining the nature of a tax, though the standard on which the tax is levied my be a relevant consideration, it is not a conclusive consideration." The principle was reaffirmed by this Court in The Hingir-Rampur Coal Co. Ltd. and Others v. The State of Orissa and Others - (1961) 2 S.C.R. 537, where the form in which the levy was imposed was held to be an impermissible test for defining in itself the character of the levy. It was observed :- "...... the mere fact that the levy imposed by the impugned Act had adopted the method of determining the rate of the levy by reference to the minerals produced by the mines would not by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... removal of the article from the factory. The wholesale price was envisaged as a cash price in order to make it a uniform standard, because it was then a price freed from the burden of an increase on account of credit or other advantage allowed to a buyer, a factor which may vary from transaction to transaction and from buyer to buyer. The essential distinction between clause (a) and clause (b) of Section 4 appears to lie in this, that clause (a) is invoked when the wholesale cash price is ascertainable and clause (b) when the wholesale cash price cannot be ascertained. 15. As we have said, it was open to the Legislature to specify the measure for assessing the levy. The Legislature has done so. In both the old Section 4 and the new Section 4, the price charged by the manufacturer on a sale by him represents the measure. Price and sale are related concepts, and price has a definite connotation. The "value" of the excisable article has to be computed with reference to the price charged by the manufacturer, the computation being made in accordance with the terms of Section 4. 16. A contention was raised for some of the assessees, that the measure was to be found by reading Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ose oils in Bombay by the appellants themselves provided that such sales had taken place. It was noted that large stocks of oil were imported at Bombay and all contracts for sale were made with reference to stocks. The oils were disposed of directly to consumers and never to dealers. The appellants themselves discharged all the functions of retailers of their oil as so sold. Besides, the selling price to consumers was about 70 per cent above the entry price, the difference representing the appellant's retailing profit and the expenses incurred by them in respect of matters subsequent to importation. The quantities of oil purchased by individual consumers were in some cases very large indeed. The Privy Council took the view that in no sense could the price charged to consumers for the oils imported by the appellants be regarded as "a wholesale cash price", and that therefore the case did not fall within Section 30(a) but must be regarded as attracting Section 30(b). 19. On the other side of the line is Ford Motor Company of India Ltd. v. Secretary of State for India in Council - L.R. 65 I.A. 32 = 1978 E.L.T. (J 265), in which the Privy Council had to consider the scope of Secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mportation, and if it is a "wholesale cash price, less trade discount" the clause is not inapplicable for want of sales of other goods. The clause can be applied distributively to each of the motor cars in this consignment, and even if they are regarded collectively the clause is not defeated. A particular car may be sold at a price which, having regard to other transactions in such cars, or to other circumstances, is too high or too low. In that sense, the actual price in a particular instance does not necessarily or finally establish a wholesale price to satisfy clause (a), whether the particular car or cars sold be part of the shipment in question or not. But the goods under assessment may under clause (a) be considered as members of their own class even though at the time and place of importation there are no other members. The price obtained for them may correctly represent the price obtainable for goods of the like kind and quality at the time and place of importation." 20. These two cases illustrate the fundamental distinction between provisions such as the two clauses of Section 4 of the Central Excises and Salt Act. 21. Great reliance has been placed by the assessees on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f other goods of a like kind and quality. Later follow the words, which have brought on the present controversy : "Excise is a tax on the production and manufacture of goods (see Union of India v. Delhi Cloth and General Mills (supra). Section 4 of the Act therefore provides that the real value should be found after deducting the selling cost and selling profit and that the real value can include only the manufacturing cost and the manufacturing profit. The section makes it clear that excise is levied only on the amount representing the manufacturing cost plus the manufacturing profit and excludes post-manufacturing cost and the profit arising from post-manufacturing operation, namely selling profit." Those observations were made when the Court was examining the meaning of the expression "wholesale cash price". What the Court intended to say was that the entire cost of the article to the manufacturer (which would include various items of expense composing the value of the article) plus his profit on the manufactured article (which would have to take into account the deduction of 22% allowed as discount) would constitute the real value had to be arrived at after off-loading the di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the wholesale dealer who purchases the goods from the manufacturer and sells them in wholesale to another dealer were taken as the value of the goods, it would include not only the manufacturing cost and the manufacturing profit of the manufacturer but also the wholesale dealer's selling cost and selling profit and that would be wholly incompatible with the nature of excise. It may be noted that wholesale market in a particular type of goods may be in several tiers and the goods may reach the consumer after a series of wholesale transactions. In fact the more common and less expensive the goods, there would be greater possibility of more than one tier of wholesale transactions. For instance, in a textile trade, a manufacturer may sell his entire production to a single wholesale dealer and the later may in his turn sell the goods purchased by him from the manufacturer to different wholesale dealers at state level, and they may in their turn sell the goods to wholesale dealers at the district level and from the wholesale dealers at the district level the goods may pass by sale to wholesale dealers at the city level and then, ultimately from the wholesale dealers at the city ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to those pertaining to the subsequent sale transactions effected by the wholesale buyers in favour of other dealers. 24. Having explained the true scope of Voltas Ltd. (supra) and Atic Ltd. (supra), we may now proceed directly to the consideration of certain aspects of the provisions of the old Section 4. There has been serious argument on the question whether Section 4(a) provides for the value of the assessee's excisable article being determined on the basis of the wholesale cash price charged or chargeable for articles of the like kind and quality sold by manufacturers generally or on the basis of the wholesale cash price for articles of the like and quality sold by the assessee. At first blush, it would seem that the former construction should be accepted, and indeed some support can be derived for that view from the observations of the Privy Council in Vacuum Oil Co. (supra), where the "wholesale cash price" mentioned in Section 30(a) of the Sea Customs Act, 1878, was construed to means "that price current for staple articles, the amount of which, if not a subject of daily publication in the press, is easily ascertainable in appropriate trade circles". But this general ob ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ained on the basis that the sale to the wholesale dealer is at arm's length. We are, therefore, of the view that we should prefer the construction suggested by the Revenue, that Section 4(a) applies to the goods manufactured by the assessee himself. We may also point out that this conclusion is in accord with the general intent expressed in the new Section 4(i)(a), and as we shall show presently it is the case of both the assessees and the Revenue that in enacting the new Section 4 in supersession of the old section, no material departure was intended from the basic scheme for determining the value of the excisable article. 25. Accordingly, we hold that pursuant to the old Section 4(a) the value of an excisable article for the purpose of the excise levy should be taken to be the price at which the excisable article is sold by the assessee to a buyer at arm's length in the course of wholesale trade at the time and place of removal. Where, however, the excisable article is not sold by the assessee in wholesale trade but, for example, is consumed by the assessee in his own industry the case is one where under the old Section 4(a) the value must be determined as the price at w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... son, the new Section 4(1)(b) provides that the nearest ascertainable equivalent thereof determined in such manner as may be prescribed shall be the value of the excisable goods for the purpose of charging the excise duty. 31. It will be noticed that the basic scheme for determination of the price in the new Section 4 is characterised by the same dichotomy as that observable in the old Section 4. It was not the intention of Parliament, when enacting the new Section 4 to create a scheme materially different from that embodied in the superseded Section 4. The object and purpose remained the same, and so did the central principle at the heart of the scheme. The new scheme was merely more comprehensive and the language employed more precise and definite. As in the old Section 4, the terms in which the value was defined remained the price charged by the assessee in the course of wholesale trade for delivery at the time and place of removal. Under the new Section 4 the phrase "place of removal" was defined by Section 4(b) not merely as "the factory or any other place or premises of production or manufacture of the excisable goods" from where such goods are removed but was extended to "a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat therefore the same limitations should be read into the new Section 4, the learned Solicitor General approached the problem from the other end and contended that since on a plain reading of the new Section 4 the price actually charged by the assessee was the true criterion and was not limited to the manufacturing cost and manufacturing profit it is that construction which should be put also on the old Section 4. We have earlier indicated our inability to accept the proposition that the old Section 4 defined the value of an excisable article in terms of the manufacturing cost and manufacturing profit exclusively. We find from an examination of the provisions of the new Section 4 that a similar conclusion must follow. The normal price mentioned in the new Section 4(1)(a), is the price at which the goods are ordinarily sold by the assessee in the course of wholesale trade. It is the wholesale price charged by him. It is a price which may vary, according to the first proviso to the new Section 4(a) with different classes of buyers. It may also be according to the second proviso to the new Section 4(1)(a) the price fixed as the wholesale price under any law or the maximum price where ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s helps to achieve uniformity of incidence in the levy of excise duty, depends on what is the point at which such uniformity of incidence is contemplated. It is not necessarily involved at the stage of sale of the article by the manufacturer because we find for example that under the amended Section 3(3) of the Central Excises and Salt Act, different tariff values may be fixed not only (a) for different classes or descriptions of the same excisable goods, but also (b) for excisable goods of the same class or description (i) produced or manufactured by different classes of producers or manufacturers, or (ii) sold to different classes of buyers. That the "value" of excisable goods determined under the new Section 4(a) may also vary according to certain circumstances is evident from the three clauses of the proviso to that clause. Clause (i) recognises that in the normal practice of wholesale trade the same class of goods may be sold by the assessee at different prices to different classes of buyers; in that event, each such price shall, subject to the other conditions of clause (a), be deemed to be the normal price of such goods in relation to each class of buyers. Clause (ii) provid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rged that the normal price for the purposes of the levy must be a price not loaded with extraneous elements, extraneous to the nature of the impost. It is pointed out that in order to bring the operation of the statute within the purpose intended by the Legislature the courts are justified in doing "some violence to the words" and support is taken from Luke v. I.R.C. - (1963) A.C. 557, and the principle adopted by this Court in Commissioner of Income Tax, (Central), Calcutta v. National Taj Traders - (1980) 121 ITR 535 and in K.P. Varghese v. Income-Tax Officer, Ernakulam and another - (1981) 131 ITR 597. A somewhat similar approach had already been adopted by this Court in Commissioner of Income-Tax, (Central), Calcutta v. B.N. Bhattacharjee and Another - (1979) 118 ITR 461. Learned Counsel also referred to Commissioner of Wealth-Tax, Bihar and Orissa v. Kripashankar Dayashankar Worah - (1971) 81 ITR 763 and R.B. Jodha Mal Kuthiala v. Commissioner of Income-Tax, Punjab, Jammu & Kashmir and Himachal Pradesh - (1971) 82 ITR 570. When the new Section 4(1)(a) is read as a whole, the meaning of the expression "normal price" becomes plainly evident. It will be noticed that the expressio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nable, the nearest ascertainable equivalent thereof" has to be determined. As a consequence, it is urged that where sales are made on ex-depots post-manufacturing expenses and post-manufacturing profit must be deducted. The same principle should apply in the construction of the new Section 4(1)(a). By adopting the same principle for cases falling under Section 4(1)(a) and Section 4(1)(b) it is possible, it is said, to reach uniformity of incidence in both classes of cases. It is pointed out that the value of the goods must be the same for the purposes of the levy whether the goods are sold ex-factory or ex-depot. It is urged that although the new Section 4(4)(d)(ii) permits two types of deductions of taxes and discount, it does not prohibit deductions other than the two permitted. Finally, if the wholesale price can be adjusted upward by the department making additions thereto, it can be adjusted downward, at the instance of the assessee, to make it conform to the conceptual criterion of the value on which excise can be levied. 38. The essential content of the reasons stated by learned Counsel proceeds on the assumption that a conceptual value governs the assessment of the levy. W ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the manufacturer or producer, and explained that the levy related to the manufacture or production and to no further stage. It was the nature of the levy which was adverted to by the learned Chief Justice, namely that it was a levy on goods manufactured or produced. It will be remembered that the question before the Federal Court in that case was whether the levy in question was a levy of excise or a levy of sales tax. A levy of excise turns on the manufacture or production of the excisable article, while a levy of sales tax by its nature, arises at a stage beyond, namely the sale of the article. The task before the Court was to identify the nature of the levy. It was not concerned with the assessment of the value of the article for the purpose of the levy. 40. This brings to a close in these cases the question whether the value of an article for the purpose of the excise levy must be confined to the manufacturing cost and the manufacturing profit in respect of the article. In our judgment, the question has to be answered in the negative. 41. The next question for consideration is whether the provisions in the new Section 4 in respect of transactions effected by the assessee to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... very such case, it will be for the Revenue to determine on the evidence before it whether the transaction is one where extra-commercial considerations have entered and, if so, what should be the price to be taken as the value of the excisable article for the purpose of excise duty. Nonetheless, it was open to Parliament to incorporate provisions in the section declaring that certain specified categories of transactions fall within the tainted class, in which case an irrebuttable presumption will arise that transactions belonging to those categories are transactions which cannot be dealt with under the usual meaning of the expression "normal price" set forth in the new Section 4(1)(a). They are cases where it will not be necessary for the Revenue to examine the entire gamut of evidence in order to determine whether the transaction is one prompted by extra-commercial considerations. It will be open to the Revenue, on being satisfied that the third proviso to the new Section 4(1)(a) read with the definition of "related person" in Section 4(4)(c) is attracted, to proceed to determine the "value" in accordance with the terms of the third proviso. 43. It is urged on behalf of the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting such a tax. The charging provision and the machinery provisions of the Act, it is pointed out, deal exclusively with excise duty and not with any other tax. The validity of the provision is assailed also on the ground that it violates Articles 14 and 19 of the Constitution. The challenge made on behalf of the assessees is powerful and far-reaching. But it seems to us unnecessary to enter into that question because we are satisfied that the provision in the definition of "related person" relating to a distributor can be legitimately read down and its validity thus upheld. In our opinion, the definition of related person should be so read that the words "a relative and a distributor of the assessee" should be understood to mean a distributor who is a relative of the assessee. It will be noticed that the Explanation provides that the expression "relative" has the same meaning as in the Companies Act, 1956. As regards the other provisions of the definition of "related person", that is to say, "a person who is so associated with the assessee that they have interest, directly or indirectly, in the business of each other and includes a holding company, a subsidiary company....", we t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... est ascertainable equivalent thereof determined in the manner prescribed by the Central Excise (Valuation) Rules, 1975 should be taken as representing the excisable value of the goods; (iii) Where wholesale price of any excisable goods for delivery at the place of removal is not known and the value thereof is determined with reference to the wholesale price for delivery at a place other than the place of removal, the cost of transportation from the place of removal to the place of delivery should be excluded from such price; (iv) Of course, these principles cannot apply where the tariff value has been fixed in respect of any excisable goods under sub-section (2) of Section 3; (v) On a proper interpretation of the definition of `related person' in sub-section (4)(c) of Section 4, the words "a relative and a distributor of the assessee" do not refer to any distributor but they are limited only to a distributor who is a relative of the assessee within the meaning of the Companies Act, 1956. So read, the definition of `related person' is not unduly wide and does not suffer from any constitutional infirmity. It is within the legislative competence of Parliament. It is only wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the provision should be construed as confined to primary packing and as not extending to secondary packing. The heads under which the claim to deduction is made are detailed below : (1) Storage charges. (2) Freight or other transport charges, whether specific or equalised. (3) Outward handling charges, whether specific or equalised. (4) Interest on inventories (stocks carried by the manufacturer after clearance). (5) Charges for other services after delivery to the buyer. (6) Insurance after the goods have left the factory gate. (7) Packing charges. (8) Marketing and Selling Organisation expenses, including advertisement and publicity expenses. 48. At the outset, we must make it clear that the contentions in this regard on behalf of the assessees proceeds on two broad bases. The first is that to determine the value of an excisable article, all expenses must be excluded which do not enter into the formula of manufacturing cost plus manufacturing profit. This follows from the principal plank of the assessees' case that the "value" must be confined to the manufacturing cost, and the manufacturing profit. For, it is said, that if the deductions claimed are allowed, the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce on the freight for transportation of the goods from the factory gate to the place or places of delivery. 50. Where freight is averaged and the averaged freight is included in the wholesale cash price so that the wholesale cash price at any place or places outside the factory gate is the same as the wholesale cash price at the factory gate, the averaged freight included in such wholesale cash price has to be deducted in order to arrive at the real wholesale cash price at the factory gate and no excise duty can be charged on it. 51. The case in respect of the cost of packing is somewhat complex. The new Section 4(4)(d)(i) has made express provision for including the cost of packing in the determination of "value" for the purpose of excise duty, inasmuch as the case of the parties is that the new Section 4 substantially reflects the position obtaining under the unamended Act. We shall proceed on the basis that the position in regard to the cost of packing is the same under the Act, both before and after the amendment of the Act. Section 4(4)(d)(i) reads : "(4) For the purposes of this section - (d) "value", in relation to any excisable goods, - (i) where the goods are delivere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded in the "value" of the article for the purpose of the excise levy. To that extent, the cost of secondary packing cannot be deducted from the wholesale cash price of the excisable article at the factory gate. 52. If any special secondary packing is provided by the assessee at the instance of a wholesale buyer which is not generally provided as a normal feature of the wholesale trade, the cost of such packing shall be deducted from the wholesale cash price. 53. We have also been referred to Section 2(f) of the Act which defines the expression "manufacture", and it is urged that the degree of packing to be considered for the purpose of including its cost in the "value" of an excisable article should be spelled out from that definition. We are unable to accept the suggestion. The expression "manufacture" is related to the taxable event and refers to a process which enters into the character of the article, while "packing" has been defined by Section 4(4)(d)(i) in relation to the "value" of the article. 54. That, we think, is the position in regard to the cost of packing under the Act, both before its amendment and after. 55. We have considered the claim to deductions under the s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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