Wooden packing cost excluded from assessable value where it was used only for transport protection, not marketability.

Wooden packing used for machinery and parts was not includible in assessable value where goods were cleared in unpacked condition in some cases and local clearances were made without packing. Because the packing served mainly to protect goods during long-distance transport and was not shown to be necessary for making the goods marketable or for sale in the wholesale market at the factory gate, its cost was not required to be added to assessable value. The demand and penalty were therefore not sustainable.

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Issues: Whether the cost of wooden packing provided to the machinery and parts thereof was includible in the assessable value of the final product.

Analysis: The goods were shown to have been cleared in unpacked condition at the factory gate in some cases, and local clearances were made without packing. The packing was used mainly to protect the goods during long-distance transit and to prevent damage in transport. Such packing was not shown to be necessary for putting the goods in a marketable condition or for sale in the wholesale market at the factory gate.

Conclusion: The cost of the packing material was not required to be added to the assessable value, and the demand and penalty were not sustainable.

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