TaxTMI 
TaxTMI 
1991 (8) TMI 181
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.... packed in cartons and then put in polythene bags and thereafter, in wooden cases. In the price list, they claimed abatement of duty on the cost of wooden cases relying on the judgment of the Hon'ble Supreme Court in Godfrey Philips 1985 (22) E.L.T. 306 (S.C.). The Asstt. Collector issued a show cause notice proposing to disallow the claim made by the respondents. In reply to the show cause notice, the respondents stated that the function of wooden boxes used is to protect the Electrodes contained in the cartons from damage during transit. This is nothing but protective packing. They further contended that packing in wooden cases is also done with a view to facilitate transport of Electrodes from the factory gate to the godowns of wholesale....
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.... the value of the goods. The wooden cases serve like primary packing before removal of the goods from the factory gate and it is an essential necessity to contain the polythene cartons for removal at the factory gate. 3. On appeal, the Collector held that the electrodes are packed in 120 or 150 in numbers depending upon their brands in cartons which are well covered with cellophane sheets. It cannot be said that 120 or 150 electrodes are sold in retail. .Wooden cases are used for packing 1200 electrodes or 1500 electrodes and are removed from the factory in such cases. He observed that there is nothing to indicate that the wooden case packing is essential in wholesale trade in goods except to protect the goods during transit. The sale to....
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....upreme Court against the above said two orders. 5. Before we dispose of the appeals, we would like to deal with the argument of Shri Ganu that the issue is not covered by the earlier orders of this Tribunal as the facts in the present case are entirely different. He submitted that the finding of the Asstt. Collector is that the Electrodes are sold at the depot in wooden cases and the wooden cases are essential for making the goods marketable. In view of the finding of the Asstt. Collector, the value of wooden boxes is includible in the assessable value of electrodes. He also relied upon the judgment of the Supreme Court in C.C.E. v. Pond's India Ltd. [1989 (44) E.L.T. 185 (S.C.)] wherein it was observed that the packing in which the good....
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....it is collected is not determined by the point of time when its manufacture is completed, but will rest on consideration of administrative convenience and then generally it is collected when the article leaves the factory for the first time." Thus, Section 3 defines the nature of the charge. It was further observed that "Section 4 of the Act provides the measure by reference to which the charge is to be levied. When enacting a measure to serve as a standard for assessing the levy, the legislature need not contour it along lines which spell out the character of the levy itself. Any standard which maintains a nexus with the essential character of the levy can be regarded as valid for assessing the measure of levy." In other words, there shoul....
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....yond the value of the manufactured commodity itself. 8. We may now examine the facts of this case. The goods manufactured are electrodes. Therefore, the levy of excise is on electrodes. However, in view of the extended meaning of value by including packing, the cost of packing is also includible in the assessable value. In other words, though the excisable commodity is electrodes, the assessable value of electrodes is determined by adding the cost of packing. But the question is how much packing is includible. Is the cost of all packing is to be included in the assessable value? In determining how much cost of packing is to be included, the Supreme Court laid down in various decisions that degree of secondary packing which is necessary f....
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....the cost of wooden cases is not includible in the assessable value as it is not necessary for putting the excisable article in the condition in which it is generally sold in the wholesale market at the factory gate. We may also infer from the above that the trade practice is to market the goods in polythene bags in the wholesale market at the factory gate. We do not see any reason why we should not follow our earlier orders in the present case in the absence of any appeal challenging our earlier orders to the Supreme Court. Departing from our earlier orders, relying on a finding given by the Asstt. Collector which is based on no material, without considering the reply of the appellants, would effect the uniformity of assessment and levy of ....