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TMI Blog2005 (3) TMI 123X X X X Extracts X X X X X X X X Extracts X X X X ..... 'Act'). Second question was whether some of the show cause notices were issued beyond the period prescribed under Section 11A of the Act. The majority view was in favour of the assessee in respect of both the aforesaid issues. 2.Dispute arose in the following background : The assessee is engaged in the manufacture of various types of glass bottles for milk, soft drinks, medicines, hair-oil, beer etc. The bottles manufactured by the assessee are used by the various manufacturers of the consumer products for packing of their goods. According to the assessee, these bottles are delivered by it in loose condition at the factory gate in the course of wholesale trade. In a good number of cases its buyers want the goods to be packed in some sort of packing for safe transportation of the goods and to avoid the breakage etc. during transit, whereas in some cases, the buyers send their own packing materials like gunny bags, wooden cartons, wooden crates etc. In some cases, it buys the packing materials on behalf of its customers who reimburse the cost of the same. Wherever the packing material is supplied by the buyers viz, cardboard boxes and wooden crates etc. at their own cost, only ex- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty to approach the High Court further in case it was warranted. The interim order was directed to be continued till disposal of the case by the concerned authorities. During the pendency of the writ petition before the High Court demands on various counts including packing charges were raised by the Revenue on the RT-12 Returns. In show cause notices it was indicated that the demand was subject to the decision of the Calcutta High Court in the writ petition. The Assistant Commissioner, Central Excise (Calcutta) (hereinafter referred to as the 'adjudicating authority') adjudicated all the show cause notices and by order-in-original dated 18-12-1986 confirmed the demand of duty amounting to Rs. 2,13,89,696.29 (subsequently corrected to Rs. 2,13,78,926.16) on the ground of packing charges and dropped the demands relatable to certain other aspects. Appeal was filed before the Commissioner (Appeals) (referred to as the 'appellate authority') by the assessee which was dismissed. Therefore, 108 appeals were filed before the CEGAT. Stand of the assessee before the CEGAT was two-fold. It was submitted that the moot question was whether the packing expenses are required to be added in the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... packing had been returned by the buyers and the same had been also reused by the assessee and adjustment towards the cost of the same has been made. Though the authorities accepted the factum of return of packing material, it ignored the same on the ground that number was very small. The Revenue on the other hand submitted that in view of the categorical language of Section 4(4)(d)(i) there was no scope for excluding the packing charges on the artificial distinction of primary/specific packing charges. Even if there were some cases of return it was insignificant when compared to the volume of transactions. On the question of limitation, it was submitted that the assessee had in fact understood the order of the High Court to mean that the notices were not to be issued awaiting decision and, therefore, all the notices were within time. As noted above, the Member (Judicial) and second Member (Technical) decided both the issues after referring to the factual aspects in favour of the assessee. It was held that there was no question of any provisional assessment as projected by the Revenue and, in fact, the adjudicating authority himself had held that there was final assessment, but it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t for issuing show cause notice in terms of Section 11A. Where the self assessment scheme is in operation, limitation starts from the date of final assessment. In any event, both the assessee and the Department knew that the assessments were not final but were provisional. Therefore, the authorities had rightly held that only two show cause notices i.e. 1/78 and 2/78 were barred by limitation. 5.The agreements referred to by the assessee only show the possibility of return but not actual return. Reliance was also placed on a decision of this Court in Commissioner of Central Excise, Allahabad, etc. v. M/s. Hindustan Safety Glass Works Ltd., etc.[(2005 (2) SCALE 246)] to contend that the fact situation therein is identical to the one involved in these appeals and, therefore, the appeals deserve to be allowed. 6.In response, learned Counsel for the assessee submitted that the CEGAT's conclusions were arrived at after analyzing the factual position. Contradictory stands were taken by the adjudicating authority and the appellate authority as regards the nature of assessment covered by the show cause notices. The interim orders passed by the High Court clearly show that the authorities ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... p; xx xx (4) For the purposes of this section - xx xx xx xx xx xx xx xx (d) "value" in relation to any excisable goods,- (i) Where the goods are delivered at the time of removal in a packed condition, includes the cost of such packing except the cost of packing which is of a durable nature and is returnable by the buyer to the assessee. Explanation : In this sub-clause "packing'' means the wrapper, container, bobbin, pirn, spool, reel or wrap beam or any other thing in which or on which the excisable goods are wrapped, contained or wound. xx xx xx xx xx xx xx xx ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the cost whereof is sought to be included is the packing in which it is ordinarily sold in the course of a wholesale trade to the wholesale buyer. In other words, whether such packing is necessary for putting the excisable article in the condition in which it is generally sold in the wholesale market at the factory gate. If it is, then its cost is liable to be included in the value of the goods; and if it is not, the cost of such packing has to be excluded. Further, even if the packing is 'necessary' in the above sense, its value will not be included if the packing is of a durable nature and is returnable by the buyer to the assessee. We must also emphasize that whether in a given case the packing is of such a nature as is contemplated by the aforesaid test or not, is always a question of fact to be decided having regard to the facts and circumstances of a given case.'' After analyzing various decisions, the position was succinctly summed up by this Court in Hindustan Safety Glass Works case (supra) as follows : "We are in complete agreement with the above conclusions. The question is not for what purpose the packing is done. The test is whether the packing is done in order to pu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a recent case by this Court. (See Triveni Glass Ltd., Allahabad v. Union of India and Ors. [2005 (2) Supreme 191]. 16.Coming to the question of limitation it is to be noted that there is a conceptual difference between "levy'' and "collection''. This point was highlighted by this Court in Gokak Patel Volkart Limited v. Collector of Central Excise, Belgaum [1987 (28) E.L.T. 53 (S.C.)]. Referring to the earlier decision in Sirajul Haq Khan and Ors. v. The Sunni Central Board of Waqf, U.P. and Ors. [1959 SCR 1287] and N.B. Sanjana, Assistant Collector of Central Excise, Bombay and Ors, v. Elphinestone Spinning and Weaving Mills Co. Ltd. [1971 (3) SCR 506], the difference between levy and collection was noticed with reference to Section 3 of the Act which is the charging provision. It was held that levy and collection are two distinct and separate steps. When the High Court had stayed only the recovery/collection there was no question of any stay on the levy. 17.The two orders of the High Court, so far as relevant read as follows : "Order dated 9-4-1980 - In the meanwhile the petitioners will be at liberty to pay the duties as claimed by the respondents in respect of the goods which ..... X X X X Extracts X X X X X X X X Extracts X X X X
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