Packing cost includes duty on wrapping paper in assessable value of packed excisable goods.

Where excisable goods are cleared in packed condition, the assessable value includes the cost of packing under Section 4(4)(d) of the Central Excises & Salt Act, 1944, except durable returnable packing. The Tribunal treated excise duty paid on wrapping paper used as packing material as part of that packing cost and therefore includible in the value of the finished paper. It also noted that availability of proforma credit or Modvat credit undermined the plea of double levy. The resulting legal position was that duty on packing material formed part of assessable value.

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Issues: Whether the excise duty paid on wrapping paper used as packing material was includible in the assessable value of the finished paper cleared in packed condition.

Analysis: Under Section 4(4)(d) of the Central Excises & Salt Act, 1944, the value of excisable goods delivered in packed condition includes the cost of packing, except durable returnable packing. The cost of packing includes excise duty paid on the packing material. The Tribunal held that the duty paid on wrapping paper used for packing the finished paper formed part of the assessable value, and that the availability of proforma credit or Modvat credit negatived the plea of double levy.

Conclusion: The excise duty on wrapping paper used for packing was includible in the assessable value of the finished paper, and the assessee's challenge failed.

Ratio Decidendi: Where excisable goods are cleared in packed condition, the cost of packing, including excise duty paid on the packing material, is includible in assessable value, subject only to the statutory exclusion for durable returnable packing.

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