Secondary packing included in assessable value where outer packing was necessary for marketability and wholesale delivery

Secondary packing of detergent cakes was held to be includible in the assessable value for excise where the goods were first packed in polythene bags and then placed in larger HDPE or gunny bags for delivery to wholesale buyers or outstation customers. The reasoning treated the outer packing as necessary for delivery in wholesale trade and therefore part of the value on which duty was to be assessed. The principle applied was that packing required to make goods marketable at the factory gate forms part of assessable value.

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Issues: Whether the cost of secondary packing of detergent cakes was includible in the assessable value for excise purposes.

Analysis: The goods were first packed in polythene bags and then placed in larger HDPE or gunny bags for delivery at the factory gate to wholesale buyers or outstation customers. On these facts, the secondary packing was treated as necessary for delivery in wholesale trade and, therefore, formed part of the value to be assessed. The reasoning was consistent with the principle that packing required for making the goods marketable at the factory gate is includible in assessable value.

Conclusion: The cost of secondary packing was includible in the assessable value, and the departmental appeal succeeded.

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