Durable returnable packing cost excluded from assessable value, even when the drums are customer-owned.

Durable packing that is returnable by the buyer is excluded from assessable value under Section 4(4)(d)(i) of the Central Excises and Salt Act, 1944, and no distinction is drawn between packing owned by the assessee and packing owned by the customer. On that basis, the cost of customer-owned, returnable G.I. drums was held not includible in assessable value. Decisions concerning ordinary packing were treated as inapplicable because they did not address the statutory exception for durable and returnable containers.

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Issues: Whether the cost of durable packing in customer-owned, returnable G.I. drums was includible in the assessable value under Section 4(4)(d)(i) of the Central Excises and Salt Act, 1944.

Analysis: Section 4(4)(d)(i) excludes the cost of packing of a durable nature which is returnable by the buyer to the assessee. The goods were cleared in customer-owned drums, and the decisive question was whether ownership of the drums made them non-returnable for valuation purposes. The cited binding authority held that, for exclusion from assessable value, no distinction is to be drawn between durable packing belonging to the assessee and durable packing belonging to the customer. The contrary reliance on decisions dealing with ordinary packing was found inapposite because they did not address durable and returnable containers covered by the statutory exception.

Conclusion: The packing cost was not includible in the assessable value, and the issue was decided in favour of the assessee.

Final Conclusion: The appeal succeeded and the demand based on inclusion of the drum cost in assessable value was set aside with consequential relief.

Ratio Decidendi: Durable packing that is returnable under Section 4(4)(d)(i) is excluded from assessable value irrespective of whether the packing belongs to the assessee or to the buyer.

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