Secondary packing cost excluded from assessable value where ordinary wholesale sales used simpler packing and transport cartons were only protective.

Wooden secondary packing for diesel oil engines was held not includible in assessable value because factory-gate sales were ordinarily made in polythene packing and the wooden cartons were used only for transport protection to outstation buyers. The refund of duty paid on that packing cost was also held admissible on merits, and the claim was not barred by limitation where protest letters had been filed and the dispute on includibility continued; the absence of a further detailed representation under Rule 233B(5) did not change the payment's character as made under protest.

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Issues: (i) whether the cost of wooden secondary packing was includible in the assessable value of diesel oil engines; (ii) whether the refund claim relating to duty paid on the cost of secondary packing was admissible on merits and could be rejected as time-barred despite protest.

Issue (i): Whether the cost of wooden secondary packing was includible in the assessable value of diesel oil engines.

Analysis: The governing test was whether the packing in question was the packing in which the goods were ordinarily sold in the course of wholesale trade at the factory gate and whether such packing was necessary to put the goods in the condition in which they were generally sold. On the facts, factory-gate sales were in ordinary polythene packing, while wooden cartons were used only for outstation buyers for protection during transport. The partner's statement, to the extent it suggested that wooden packing was essential for marketability, was displaced by the subsequent affidavit and was not treated as decisive of the ordinary wholesale mode of sale.

Conclusion: The cost of wooden secondary packing was not includible in the assessable value.

Issue (ii): Whether the refund claim relating to duty paid on the cost of secondary packing was admissible on merits and could be rejected as time-barred despite protest.

Analysis: Once the cost of secondary packing was held not includible, the refund became admissible on merits. On limitation, the filing of protest letters and the continuation of the dispute on includibility were sufficient to treat the duty as paid under protest. Failure to submit a detailed representation within the period mentioned in Rule 233B(5) of the Central Excise Rules, 1944 did not alter the character of the payment as one made under protest.

Conclusion: The refund claim was admissible and could not be denied as time-barred.

Final Conclusion: The appeals succeeded, with the assessee entitled to exclusion of the wooden packing cost from assessable value and to consequential refund relief.

Ratio Decidendi: Secondary packing is includible in assessable value only when it is the packing in which the goods are ordinarily sold in wholesale trade at the factory gate and is necessary to make them marketable; a bona fide protest against duty payment is not defeated merely by the absence of a further detailed representation where protest has otherwise been recorded.

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