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TMI Blog1987 (7) TMI 105X X X X Extracts X X X X X X X X Extracts X X X X ..... irections given by the Court, all the items in respect of which the petitioners claimed deduction on the basis of earlier judgments, were referred to the Assistant Collector for the purpose of assessment and quantification. Mr. Ganesh, appearing for the petitioners in these two matters, submitted that here also I must follow the same approach. In fact he had prepared a draft of such a Format Order and he thought he could have the respondents persuaded for such an approach. However, Mr. Sethna, appearing for the respondents, pointed out that the judgment of the Supreme Court has decided as far back as on October 7, 1983 and, thereafter number of such matters have been disposed of by passing Format Orders in the year 1983-84. He submitted that these two matters somehow remained and it will not be proper, at this stage, to pass such. a Format Order. He pointed out that the order envisages that after the decision of the Assistant Collector he would be required to make a report to this High Court and the only meaning that can be given to such an order would be that the Court would consider the report and finally give its judgment, on the basis of such report. Mr. Sethna submitted that a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xtruded tubes are freely marketable without the said caps and packing material. They also say that they themselves are selling extruded tubes without caps and, therefore, they submit that these caps or packing materials do not merge with or become a part of the extruded tubes or containers. However, as and by way of providing special facility to the customers and for meeting their requirements they purchase the caps and incur the capping charges. The cost of these charges are recovered by the petitioners from the customers by adding the same to the selling price of the extruded tubes and containers. In effect they are doing the re-sale of the caps. 5. Initially, when the petition was filed, the petitioners had stated that they were claiming expenses relating to caps and capping charges as an item of post-manufacturing expenses and, therefore, they claimed deduction on that basis. However, the petition expressly refers 'to a case decided by this High Court being the case of Metal Box Co. of India Ltd. v. Union of India and others, (Misc. Petition No. 511 of 1973) decided by Mr. Justice Pendse, by his order dated July 24, 1979. The learned Judge, in that case, had come to the concl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... referred to and relied upon the judgment given by Mr. Justice Pendse, and also on the fact that the appeal against the said judgment was summarily rejected, and in spite of this, the learned Judge, has dismissed the said writ petition. He, therefore, submitted that I must follow the same course inasmuch as, it is possible for this Court to take a view that the item of caps and capping charges have been covered by the said judgment of the Supreme Court. 7. I am afraid, I cannot accept this argument of Mr. Sethna. The judgment in Bombay Tyre International Ltd. deals, essentially, with the scope of Section 4 of the Central Excises and Salt Act, and the questions relating to what items' can be and what items cannot be taken into account, as items of post-manufacturing expenses. Certainly, it does not deal with the question of classification under any heading of the Tariff. The question whether an item is an item of manufacture so as to bring the same under any heading of the Tariff, did not arise in that case at all. Justice Pendse's judgment essentially deals with an item under Item 27(e) of the Tariff and he has discussed the scope and ambit of that item. While considering the item ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such evidence as is available. He also referred to a case of Sathe Biscuits v. Union of India, reported in 1984 (17) E.L.T. 39 (Bom.) and in particular he pointed out para 11 of the said judgment. 11. As against this Mr. Sethna submitted that no direction should be given in respect of this item inasmuch as there is no change in law with regard to this aspect of the matter by the Supreme Court. He submitted that under the law if there was any packing material of durable nature and the same was returnable by the buyer to the assessee, at the time they filed their returns of the price-list, at that time only they could have claimed deduction and should have led evidence as was available at that time. He, therefore, submitted that the petitioners cannot be allowed, now, to lead evidence that the cartons and partitions were of durable nature. He contended that' they are estopped from claiming any deduction on that basis. 12. Technically, Mr. Sethna is right inasmuch as the petitioners had an opportunity to claim such a deduction at the time when they filed returns or the price list. But it appears that they were all carried away by the interpretation of law as it stood then that eve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elied upon Section 4 sub-section (4)(d)(ii) of the Act and he submits that the duty cannot include sales tax and other taxes payable on such goods and, therefore, it is certainly open to the petitioners to claim such deduction. He also relied upon a clarification issued by the Supreme Court in this behalf which we find in 1984 (17) E.L.T. 329 and the relevant directions are at page 330. Certainly the Assistant Collector will take into account this fact as and when proper material is placed before him by the petitioners. 16. The next items on which the petitioners claimed deduction are the items relating to interest and customers' credit. These items have not been spelt out in the petitions at all. Mr. Ganesh says that the Supreme Court while passing Format Orders had also directed the department to take into account all such other items which are permissible in respect of which deduction can be claimed. In that connection he referred to a recent judgment of the Supreme Court in the case of Assistant Collector v. Madras Rubber Factory, reported in 1987(27) E.L.T. 553, and in particular he drew my attention to paragraphs 14 and 16 of the said judgment. Para 14 relates to interest o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r. Ganesh submits that confiscation is a method of packing done for the purpose of easy transport and has nothing to do with the manufacture of tubes and containers, 1 think the petitioners will also have liberty to take up the matter of confiscation and lead evidence and, on the same principle as governing packing, the petitioners would be entitled to deduction. 19. This practically completes the various items which are to be considered by the Assistant Collector of Central Excise for the purpose of proper valuation. As regards the claim of deduction with regard to sole selling agency commission, the petitioners have conceded that the same is not includible (excludible)? However, Mr. Ganesh submitted that the petitioners should also be allowed to claim deduction on items not specified earlier as such. I think it would be very difficult when the matter is left at large with regard to other items. In one of the petitions there is a list of such other items at page 48 in respect of which the petitioners claim deduction on the basis that the items are post-manufacturing items. About 18 items have been set out. In that Mr. Ganesh has made it clear that they will not claim any deducti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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