Inclusion of Secondary Packing Costs in Assessable Value Upheld by Tribunal

The Tribunal held that the cost of secondary packing is includible in the assessable value of goods manufactured by M/s. Triveni Glass Ltd. The Tribunal emphasized that if the packing is necessary for selling the goods in the wholesale market, it should be included in the assessable value. Referring to previous court decisions, the Tribunal rejected the appeals, stating that changes in the law and established legal principles support the inclusion of secondary packing costs. The Board's Circular was deemed inapplicable due to amendments in the Central Excise Act and the decisions of the Supreme Court and the High Court on this issue.

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Issues involved:
Whether the cost of secondary packing is to be included in the assessable value of the goods manufactured by M/s. Triveni Glass Ltd.

Analysis:

The issue in the appeals filed by M/s. Triveni Glass Ltd. pertains to the inclusion of the cost of secondary packing in the assessable value of the goods they manufacture. The appellant's advocate referred to a circular by the Board stating that for glass and glassware, inclusion of packing charges may not be insisted upon in determining the assessable value. However, the Department argued that Section 4 of the Central Excise Act, dealing with the valuation of excisable goods, has been amended, and the Supreme Court has addressed the issue of secondary packing charges in previous cases.

The Tribunal considered the submissions from both sides. Referring to the Supreme Court's test in previous cases, the Tribunal emphasized that the cost of packing should be included if it is necessary for selling the goods in the wholesale market at the factory gate. The Allahabad High Court, in the appellants' own case, held that secondary packing is essential for selling glass sheets in the wholesale market efficiently. Therefore, the cost of secondary packing is deemed includible in the assessable value of the sheet glass. The Tribunal concluded that the Board's Circular is not applicable due to changes in Section 4 since 1975 and the decisions of the Supreme Court and the High Court in this matter. Consequently, both appeals were rejected based on the judgment of the Allahabad High Court and the legal principles established by previous court decisions.

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