Free supply of packing material may count as indirect consideration and enter assessable value in excise valuation.

Free supply of packing material by buyers, when connected with the sale of excisable goods, was treated as prima facie indirect consideration and therefore includible in the assessable value for excise valuation. The Tribunal applied the valuation rules to hold that the value of packing material used in relation to production and clearance could support inclusion where the buyer's free supply effectively reduced the price charged by the assessee. Authorities cited by the assessee were distinguished on facts. On interim relief, the Tribunal found no basis for complete waiver of pre-deposit and required a partial pre-deposit pending disposal of the appeal.

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Issues: Whether the cost of packing material supplied free of cost by buyers was includible in the transaction value of liquid glucose for excise valuation, and whether the appellant had made out a case for complete waiver of pre-deposit.

Analysis: The packing materials were supplied in connection with the sale of the goods and, when supplied free of cost, effectively reduced the price charged by the assessee. On a prima facie view, such free supply constituted indirect consideration received from the buyer and was liable to be included in the assessable value. Rule 6 of the valuation rules was also treated as supporting inclusion of the value of packing materials consumed in relation to production and clearance. The Tribunal further held that the authorities relied on by the assessee were distinguishable on facts and did not justify complete waiver at the interim stage.

Conclusion: The free supply of MS/HDPE barrels was prima facie includible in the assessable value, and the appellant was not entitled to complete waiver of pre-deposit.

Final Conclusion: Interim relief was declined in substantial part, and the appellant was directed to make a partial pre-deposit pending disposal of the appeal.

Ratio Decidendi: Free supply of packing material by the buyer, when connected with the sale of excisable goods, can amount to indirect consideration and be included in the assessable value for valuation purposes.

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