Protest-based refund claims and exclusion of customer-specific packing from excise value under settled valuation principles

Refund claims under excise law were not defeated by limitation where the record showed a contemporaneous protest letter and departmental correspondence did not disprove receipt of that protest. On valuation, only packing ordinarily forming part of the goods' marketable wholesale condition is includible in assessable value; special secondary packing supplied only at the customer's instance, such as wooden cases, cartons or gunny bags separately charged, is excluded. The note therefore reflects that a proven protest can preserve refund rights, and customer-specific packing charges are not part of excisable value.

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Issues: (i) Whether the refund claims were barred by limitation under the relevant excise refund provisions despite the assessee's plea that duty had been paid under protest. (ii) Whether the cost of secondary packing such as wooden cases, cartons and gunny bags used at the instance of customers was includible in the assessable value of glass and glassware under the excise valuation provisions.

Issue (i): Whether the refund claims were barred by limitation under the relevant excise refund provisions despite the assessee's plea that duty had been paid under protest.

Analysis: The record showed that the earlier rejection of the refund claims had not been founded on a clear time-bar finding, and the later proceedings were accompanied by a protest letter dated 20-12-1973 addressed to the departmental officer. The assessee had pursued the protest correspondence and the departmental orders did not rebut receipt of the protest communication. In these circumstances, the allegation that there was no evidence of protest was not accepted, and the limitation objection based on the refund rule did not prevail.

Conclusion: The limitation objection failed, and the refund claims could not be rejected on that ground.

Issue (ii): Whether the cost of secondary packing such as wooden cases, cartons and gunny bags used at the instance of customers was includible in the assessable value of glass and glassware under the excise valuation provisions.

Analysis: The governing principle applied was that packing charges are includible only to the extent they form part of the packing ordinarily used for making the goods marketable in wholesale trade, whereas special or secondary packing provided only on customer requirement and not forming part of the normal marketable condition is not includible. On the facts, the goods were generally sold without such special packing, and the disputed packing was used only when specially required by customers and separately invoiced. Applying the settled valuation principles, such secondary packing charges were outside assessable value.

Conclusion: The cost of the disputed secondary packing was not includible in the assessable value.

Final Conclusion: The revenue's challenge to the appellate order failed, the assessee's refund entitlement on the valuation basis was sustained, and the departmental appeals were dismissed.

Ratio Decidendi: For excise valuation, only packing that is ordinarily part of the goods' marketable form is includible in assessable value, while special packing provided at the customer's instance and used for protection or delivery is excluded; a proven protest also defeats a limitation objection founded on payment as if made voluntarily.

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