Assessable value for excise duty and packing costs must be tested against wholesale trade necessity under MRF Ltd. principle.

The assessable value for excise duty turned on whether the cost of wooden crates used to pack water heaters was includible, applying the MRF Ltd. principle on whether such packing was necessary for wholesale trade at the factory gate. The lower authorities had not applied that test and the record lacked the relevant material for a proper determination, so the matter was remanded for fresh decision after allowing the respondent to file submissions and documents.

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Issues: Whether the cost of wooden crates used for packing water heaters was includible in the assessable value for excise duty purposes.

Analysis: The dispute required examination in the light of the governing principle laid down in MRF Ltd. on whether use of the wooden crates was necessary for packing in wholesale trade at the factory gate. The orders of the lower authorities did not show that this test had been applied, and the relevant data for a proper decision was also absent.

Outcome: The matter was remanded for fresh decision after giving the respondent an opportunity to make submissions and produce documents.

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