Packing material for exported jute goods held not separately excisable where it formed part of normal minimum packing.

Pack sheets used as normal minimum packing for jute manufactures exported under bond were treated as incidental or ancillary to the completion and delivery of the goods, rather than as having a separate excisable identity. On that basis, the packing material was regarded as part of the exported product and did not attract independent central excise duty. The Revenue's challenge to the refund relief failed, and the duty demand on the pack sheets was set aside in substance.

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Issues: Whether pack sheets used for packing jute manufactures exported under bond were liable to central excise duty.

Analysis: The dispute turned on whether the pack sheets had a separate excisable identity or whether, as normal minimum packing, they formed part of the exported jute manufactures. The Tribunal followed its earlier view that where manufactured goods cannot be delivered without such packing, the packing process is incidental or ancillary to completion of the goods. On that reasoning, the pack sheets stitched around the jute goods assumed the character of part of the exported product, and no independent duty liability arose on them.

Conclusion: The pack sheets were not separately liable to central excise duty when used for packing jute manufactures exported under bond, and the Revenue appeal failed.

Final Conclusion: The demand of duty on the pack sheets was set aside in substance, and the Revenue's challenge to the refund relief granted to the assessee was rejected.

Ratio Decidendi: Normal minimum packing necessary for delivery of manufactured goods is an incidental or ancillary part of the manufacture and, where the packed goods are exported under bond, the packing material does not attract separate duty liability.

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