Independent packing material already duty-paid cannot be included again for excise valuation of packed goods.

Wrapping paper independently manufactured in the same premises and already assessed to excise duty could not be taxed again by including its value in the assessable value of the packed paper at clearance. Because the wrapping paper retained a distinct identity, was separately reflected in gate passes, approved price lists and assessment practice, and had already suffered duty at the tariff rate applicable to it, its internal use as packing material did not justify a second levy on the same article. The principle applied was that double excise on the same manufactured goods was impermissible on these facts.

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Issues: Whether wrapping paper manufactured by the assessee and used internally for packing other varieties of paper could be subjected to central excise duty twice, first on manufacture and again by including its value in the assessable value of the packed paper at the time of clearance.

Analysis: The wrapping paper and the other varieties of paper were manufactured in the same premises and were separately shown in gate passes, approved price lists, and assessment practice. The wrapping paper retained a distinct identity and was separately assessable before its use as packing material. The earlier High Court ruling on identical facts held that once duty had been paid on the wrapping paper at the tariff rate applicable to it, the same paper could not again be subjected to duty by adding its value to the value of the packed paper. The Tribunal accepted that the facts were on all fours with that decision and that the internal use of the wrapping paper did not justify a second levy on the same article.

Conclusion: The wrapping paper was liable to excise duty only once, and the assessee was entitled to clear the goods without a second levy on the wrapping paper used for packing.

Ratio Decidendi: Where wrapping material is independently manufactured and already assessed to excise duty, its value cannot be included again in the assessable value of the packed goods for a second levy on the same article.

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