Packing cost forms part of excise assessable value for goods cleared in packed condition, unless packaging is durable and returnable.

Where excisable goods are removed in packed condition, the cost of packing and related packing charges form part of the assessable value under the valuation provision, unless the packing is durable and returnable by the buyer. The analysis treats packing as part of the cost structure of the marketable product and rejects exclusion merely because the packing process is separately described or the goods might theoretically be sold in bulk in another context. On that basis, the refund claim based on exclusion of packing cost was unsustainable and the levy on packed goods was upheld.

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Issues: Whether, under Section 4(4)(d)(i) of the Central Excises and Salt Act, 1944, the cost of packing materials and related packing charges forming part of goods cleared in packed condition were includible in the assessable value for excise duty, and whether the suit for refund based on the contrary view could succeed.

Analysis: The goods were found to be cleared from the factory only in packed condition, and the packing used was not shown to be of a durable nature returnable by the buyer to the assessee. The statutory scheme of Section 4, as amended, expressly required inclusion of the cost of packing in the valuation of excisable goods where removal takes place in packed condition, subject only to the stated exception. The earlier Division Bench view relied on by the trial court had been disapproved by the Full Bench, which held that packing cost forms part of the cost structure of the marketable excisable product and cannot be excluded from assessable value merely because the packing process may be separately described or because the goods may theoretically be capable of bulk sale in another context.

Conclusion: The packing charges were rightly includible in the assessable value, and the refund claim based on exclusion of packing cost failed.

Final Conclusion: The decree in favour of the plaintiff-company could not stand, and the revenue's levy on packed goods was sustained.

Ratio Decidendi: Where excisable goods are removed in packed condition, the cost of packing is part of the assessable value under the valuation provision, except where the packing is durable and returnable by the buyer.

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