Packing material cost is includible in assessable value when credit of duty on such material is availed.

Where an assessee avails credit of duty paid on packing material supplied free of cost, the cost of that packing material forms part of the assessable value of the excisable goods. On the admitted factual position of credit being taken, the packing material cost was held includible in valuation, and the Commissioner (Appeals) order was modified accordingly in favour of the Revenue.

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Issues: Whether the cost of packing material supplied free of cost was includible in the assessable value of the goods when the respondents were availing credit of duty paid on such packing material.

Analysis: The respondents admitted that they were availing credit in respect of the duty paid on the packing material. On that admitted factual position, the cost of packing material formed part of the assessable value of the manufactured goods.

Conclusion: The cost of packing material was held includible in the assessable value, and the appeal was allowed to that extent in favour of the Revenue.

Final Conclusion: The order of the Commissioner (Appeals) was modified so as to include the packing material cost in the assessable value of the goods manufactured by the respondents.

Ratio Decidendi: Where the assessee avails credit of duty paid on packing material, the cost of such packing material is includible in the assessable value of the excisable goods.

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