Packing cost enters assessable value; separately manufactured wrapper paper is also independently dutiable under excise valuation rules.

Packing or wrapping cost necessary for sale forms part of the assessable value of excisable goods, and a separately manufactured wrapper remains independently liable to central excise duty when it is itself a marketable commodity. On that basis, the full cost of wrapper paper, including excise duty already paid on it, was treated as includible in the value of the wrapped paper, and the double taxation objection was rejected because the levy applied to different goods in different capacities. The earlier demand was treated as time-barred in the absence of proof of provisional assessment, but no refund was granted on the facts recorded.

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Issues: (i) whether the full cost of wrapper paper, including excise duty already paid on it, forms part of the assessable value of the wrapped paper for levy of central excise duty; (ii) whether the demand for duty for the earlier period was barred by limitation and whether duty paid under protest could be refunded.

Issue (i): Whether the full cost of wrapper paper, including excise duty already paid on it, forms part of the assessable value of the wrapped paper for levy of central excise duty.

Analysis: The wrapper paper was treated as a marketable excisable commodity as soon as it was manufactured, and its later use for packing other paper did not prevent its separate levy to duty. The inclusion of packing cost in the value of the wrapped goods was treated as consistent with excise valuation, since the assessable value of the finished goods necessarily reflects the cost of the packing or wrapper used to market them. The plea of double taxation was rejected because the duty was not being levied twice on the same article in the same character, but on the wrapper as a manufactured product and again on the packed goods on the basis of their package value.

Conclusion: The full cost of the wrapper paper, including excise duty already paid, was held includible in the assessable value of the wrapped paper, in favour of Revenue.

Issue (ii): Whether the demand for duty for the earlier period was barred by limitation and whether duty paid under protest could be refunded.

Analysis: The record did not support the department's plea that the demand arose from provisional assessment. As no provisional assessment procedure under the relevant rule was shown to have been followed, the demand for the earlier period was treated as time-barred. However, the duty had in fact been paid on demand, and the payment was not shown to have been recovered by coercive means; the majority therefore declined to order refund of a legitimately payable duty merely because the demand itself was not enforceable.

Conclusion: The demand for the earlier period was held time-barred, but no refund was granted.

Final Conclusion: The appeal failed because excise duty on the wrapper paper was upheld on merits, and the challenge to the earlier demand did not result in any refundable relief.

Ratio Decidendi: In valuing excisable goods, the cost of packing or wrapping necessary for their sale forms part of the assessable value, and a separately marketable wrapper is independently liable to duty when manufactured.

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