Depot sales after repacking include packing cost in assessable value, with duty recomputed on a cum-duty basis.

For depot sales made after repacking goods into smaller packages, the assessable value under the post-1-7-2000 transaction value regime includes the packing cost recovered from buyers, because the depot is a place of removal and the sale occurs there. Where the value is directly ascertainable under Section 4(1)(a) of the Central Excise Act, 1944, recourse to Rule 7 of the Central Excise Valuation Rules, 2000 is unnecessary. The duty, however, must be recomputed on a cum-duty basis when the recovered amount represents the sale price.

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Issues: Whether packing charges recovered on goods sold from the depot after repacking into smaller packages were includible in the assessable value, and whether the matter required remand for recomputation on a cum-duty basis.

Analysis: The valuation regime applicable from 1-7-2000 requires assessment on the basis of transaction value under Section 4(1) of the Central Excise Act, 1944 where goods are sold at the time and place of removal. Goods transferred to a depot and later sold there from, after repacking into smaller packs, are sold from a place of removal within the meaning of Section 4(3)(c)(iii). For such depot sales, the transaction value of the smaller packages, including packing cost, forms the assessable value. As the value is ascertainable directly under Section 4(1)(a), resort to Rule 7 of the Central Excise Valuation Rules, 2000 was unnecessary. The adjudicating authority was nevertheless required to recompute the duty treating the recovered amount as cum-duty price.

Conclusion: The packing charges were rightly held includible in the assessable value, and the remand for fresh computation on a cum-duty basis was upheld. The appeal failed.

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