Packing cost in assessable value turns on ownership of drums and carboys and whether packing charges were separately recovered.

Packing cost for VAM in drums and carboys was examined on the basis of ownership and recovery of charges. Where packing containers were supplied free by buyers, their value could not be included in assessable value. The record also showed that, in some cases, the drums and carboys belonged to the assessee and no separate packing charges were recovered, but this factual position had not been properly verified. The demand therefore could not stand as framed, and the matter was remanded for fresh determination on includibility of packing cost where the containers belonged to the assessee.

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Issues: Whether the cost of drums and carboys used for packing VAM was includible in the assessable value, particularly where the packing belonged to the assessee or was supplied free of cost by buyers.

Analysis: The invoices indicated that in many cases the drums and carboys belonged to the owner or were supplied by the customer, and the adjudicating authority had not properly verified the appellant's contention that where the assessee's own drums were used, the packing cost was not separately recovered but formed part of the invoice price. Packing supplied free of cost by buyers could not be included in assessable value. The matter required verification on the question whether duty was payable on the packing element where the containers belonged to the assessee and no separate packing charges were collected.

Conclusion: The demand could not stand as made, and the matter was remanded for fresh decision on the includibility of packing cost in cases where the drums or carboys belonged to the assessee.

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