Assessable value excludes corrugated box packing used only for outstation sales of water heaters.

Packing costs for corrugated boxes used only when water heaters were supplied to outstation customers were not includible in assessable value. The relevant test was whether the packing was necessary to place the excisable goods in the condition in which they were ordinarily sold in the wholesale market at the factory gate. Because the goods cleared at the factory gate were not generally sold in corrugated boxes, such packing was treated as sales-specific and outside the assessable value, even though outstation clearances formed the larger share of sales.

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Issues: Whether the cost of corrugated boxes used for packing water heaters supplied to outstation customers was includible in the assessable value.

Analysis: The goods cleared at the factory gate were not ordinarily sold in corrugated boxes. The relevant test was whether the packing was necessary for putting the excisable goods in the condition in which they were generally sold in the wholesale market at the factory gate. Packing used only for outstation sales did not satisfy that test, even though such clearances formed the larger portion of total sales.

Conclusion: The cost of corrugated boxes was not includible in the assessable value.

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