Assessable value for excise excludes already-included packing and job-work costs; further duty demand was rejected.

Packing material cost and job-work charges incurred at the job worker's end were held not to be separately added again to the assessable value for central excise purposes where duty had already been discharged on the transaction value charged to the ultimate customer after packing and clearance. The operative point was that pre-sale expenditure forming part of the overall sale price was already reflected in the value on which duty was paid, so a further loading of those costs would result in double inclusion. The differential duty demand was rejected and the assessee's valuation approach was upheld.

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Issues: Whether the cost of packing material and job-work charges incurred at the job worker's end was includible in the assessable value for the purpose of demanding differential central excise duty.

Analysis: The appellant had discharged duty on the value charged to the ultimate customer after the goods were packed and cleared from the job worker's premises. Once duty was paid on the transaction value at which the goods were ultimately sold, any pre-sale cost forming part of the overall sale price stood included in that value. The additional packing-related expenditure at the job worker's end could not be separately loaded again into the assessable value to create a further duty demand.

Conclusion: The differential duty demand was unsustainable and the inclusion of packing material cost and job-work charges in the assessable value was rejected in favour of the assessee.

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