Secondary packing and excise valuation: packing needed for wholesale sale is includible unless proved durable and returnable.

Secondary packing of fragile glass sheets is includible in excise assessable value where it is necessary to make the goods fit for wholesale sale at the factory gate, unless the assessee proves that the packing is durable and returnable by the buyer. The court applied Supreme Court guidance and held that the petitioner had not shown the secondary packing to be unnecessary for wholesale sale, nor established a consistent practice of return and reuse. Mere assertions and isolated invoice endorsements were insufficient. The price-list approvals subject to inclusion of packing charges were therefore free from legal infirmity.

---

---

Issues: Whether the cost of secondary packing of glass sheets was includible in the assessable value for excise duty, and whether the impugned approval of price lists subject to inclusion of packing charges was liable to be quashed.

Analysis: The governing test, as applied from the Supreme Court authorities, was whether the packing in question was necessary for putting the goods in the condition in which they were ordinarily sold in wholesale trade at the factory gate, and if so, whether the packing was of a durable nature and returnable by the buyer. On the facts, the Court found that the petitioner had not established that the secondary packing was unnecessary for wholesale sale of fragile glass sheets, nor that the crates and similar packing were in fact durable and returnable in the relevant sense. Mere assertions and isolated invoice endorsements were insufficient to show a consistent practice of return and reuse.

Conclusion: The cost of the secondary packing was rightly included in the assessable value, and the orders approving the price lists subject to such inclusion suffered from no legal infirmity.

Ratio Decidendi: Secondary packing is includible in the assessable value if it is necessary for sale in the wholesale market at the factory gate, unless the assessee proves that the packing is durable and returnable by the buyer.

---