TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
Use comma for multiple locations.
---------------- For section wise search only -----------------
Accuracy Level ~ 90%
of 
Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
Join Channel
Note
Bookmark
Share
Don't have an account? Register Here
of Press 'Enter' after typing page number.
Issues: (i) whether the impugned show cause notices could be sustained when the very same question concerning inclusion of special secondary packing had already been decided finally in favour of the assessee in earlier departmental proceedings, and whether a substantial part of the demand was barred by limitation; (ii) whether the cost of the special secondary packing used for refrigerators delivered outside Bombay was includible in the assessable value under the valuation provisions of the Central Excises and Salt Act, 1944.
Issue (i): whether the impugned show cause notices could be sustained when the very same question concerning inclusion of special secondary packing had already been decided finally in favour of the assessee in earlier departmental proceedings, and whether a substantial part of the demand was barred by limitation.
Analysis: The earlier appellate order had finally held that the value of the special secondary packing was not includible in the assessable value, and no revision or review had been undertaken thereafter. In the absence of any change in facts or law at the time of the impugned notices, the departmental authorities were bound by that final determination and could not reopen the issue through subordinate proceedings. The notices were also examined against the statutory period of limitation under section 11A, and a substantial portion of the demand was found to be time-barred. The notices were therefore liable to fail on jurisdictional and temporal grounds.
Conclusion: The impugned show cause notices were without jurisdiction and a substantial part of the demand was barred by limitation.
Issue (ii): whether the cost of the special secondary packing used for refrigerators delivered outside Bombay was includible in the assessable value under the valuation provisions of the Central Excises and Salt Act, 1944.
Analysis: For valuation under section 4, only the packing necessary to place the goods in the condition in which they are ordinarily sold in the wholesale market at the factory gate is includible. The Court distinguished between packing ordinarily used for factory-gate wholesale sales and special packing required only for transport to remote markets. On the facts, refrigerators were sold at the factory gate in Bombay in polythene covers, and that was the packing relevant to the wholesale market. The additional fibre-box and wooden-base packing used for outstation deliveries was special transport packing, separately charged and not a normal feature of wholesale trade at the factory gate. Its cost could not, therefore, be added to the assessable value.
Conclusion: The cost of the special secondary packing was not includible in the assessable value and was deductible from the wholesale price.
Final Conclusion: The challenge to the notices succeeded, and the valuation dispute was resolved in favour of excluding the special secondary packing from excise assessment.
Ratio Decidendi: For excise valuation, only the cost of packing necessary for sale in the ordinary wholesale market at the factory gate is includible, and a final departmental determination on the same issue binds subordinate authorities unless law or facts materially change.
TaxTMI 
