Tribunal excludes optional packing charges from assessable value under Central Excise Tariff Act

The tribunal held that the additional packing charges provided by the appellant were not includible in the assessable value of the final product under the Central Excise Tariff Act, 1985. The tribunal found that the additional packing was optional and provided for safe transportation in limited cases, distinguishing it from normal packing costs. Relying on a Supreme Court judgment regarding the inclusion of packing costs in wholesale trade, the tribunal overturned the original order and allowed the appeal, ruling in favor of the appellant on 31/10/17.

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Issues:
1. Whether the additional packing charges provided by the appellant are includible in the assessable value of the final product under the Central Excise Tariff Act, 1985.

Analysis:
The case involved the appellant engaged in the manufacture and clearance of PVC films, foils, sheets, etc., under specific chapters of the Central Excise Tariff Act, 1985, on behalf of a loan license. The appellant declared that the price list included normal packing costs, with additional packing costs and interest on delayed payments charged separately. The department issued a show cause notice demanding duty on the cost of additional packing charges for outstation customers. The original order confirmed the duty demand and imposed a penalty, leading the appellant to file an appeal before the Commissioner(Appeals), who upheld the original order, prompting the appeal to the tribunal.

The appellant argued that the cost of secondary packing, like wooden boxes for protecting goods during transportation, was not included in the normal price, making it non-assessable. They highlighted that the additional packing was optional and provided only for upcountry transportation in a limited number of cases. The appellant cited relevant judgments to support their position.

On the other hand, the Revenue contended that wooden boxes/crates constituted normal packing and should be included in the assessable value of the finished goods. They relied on a Supreme Court judgment to support their stance.

After considering both parties' submissions and examining the records, the tribunal found that the additional packing was provided in only a few cases for safe transportation, indicating it was not part of the assessable value. They referred to a Supreme Court judgment that clarified the inclusion of packing costs in the wholesale trade. The tribunal distinguished the Revenue's cited judgment involving delicate glass sheets, where wooden boxes were essential, from the present case. Consequently, the tribunal held that the additional packing provided by the appellant was not includible in the assessable value of the final product, overturning the impugned order and allowing the appeal.

The tribunal pronounced the judgment on 31/10/17.

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