Transportation packing cost for machine parts is excluded from assessable value when boxes are used only for safe delivery.

Packing cost incurred solely for safe transportation of metal machine parts in wooden boxes for out-station deliveries is not includible in assessable value under Section 4 of the Central Excises and Salt Act, 1944, because the goods were marketable without such packing and local sales were made in polythene bags alone. The same deduction principle applicable to gross sale price under Section 4 also applies when valuing goods under Notification No. 120/75-C.E. The transportation-related packing expense is therefore excluded from assessable value.

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Issues: Whether the cost of wooden boxes used for packing machine parts for out-station deliveries was includible in the assessable value under Notification No. 120/75-C.E. and Section 4 of the Central Excises and Salt Act, 1944.

Analysis: The wooden box was used only for safe transportation during long-distance delivery, while local sales were made in polythene bags alone. The goods were metal machine parts, not delicate or fragile articles, and were capable of being marketed without wooden-box packing. The cost of such packing was therefore treated as a transportation-related expense and not part of the assessable value. The same deductions admissible from the gross sale price under Section 4 were held applicable while determining value under the exemption notification as well.

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

Final Conclusion: The appeals failed and the cross objection did not survive, leaving the order in favour of the assessee undisturbed.

Ratio Decidendi: Packing cost incurred only for safe transportation of goods and not for making them marketable is not includible in assessable value, and the same principle applies while computing value under the exemption notification.

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