2001 (7) TMI 342

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....r, learned Consultant, submitted that cost of packing material which is supplied by the customers is not includible in the assessable value of the pet jars; that the Apex Court in the case of Hindustan Polymers v. C.C.E. - 1989 (43) E.L.T. 165 (S.C.) observed that where the assessee has sold the goods in bulk and delivered to the factory gate also in drums, the cost of packing materials supplied by the buyer is not includible; that the Court also held that the word 'cost' has a definite connotation and is used generally in contradiction to the expression 'value'; that the clear implication of the use of the word cost is that only packing cost which is incurred by the assessee is to be included, that if the word 'cost' is interpreted to incl....

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....n, learned SDR, submitted that the normal packing for the pet jars manufactured by the appellants is cartons; that the Commissioner has given the very clear and specific findings in the impugned order that cartons are their normal packing which has been accepted by the officials of the appellants as well as their customers; that the ratio of the decision in the case of Hindustan Polymers is not applicable as the goods in the said case were sold in tankers without being packing or contained in drums. The learned SDR, further, mentioned that the cost of, labels is to be included in the assessable value as the process of affixing labels on pet jars is incidental or ancillary to the manufacture of jars. He relied upon the decision of the Apex C....

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.... cost of packing has been finally settled by the Apex Court in the case of Government of India v. Madras Rubber Factory Ltd. - 1995 (77) E.L.T. 433 (S.C.) by laying down the test for including the packing charges in the assessable value as under :- "The Test is : Whether packing, the cost whereof is sought to be included is the packing in which it is ordinarily sold in the course of a wholesale trade to the wholesale buyer. In other words, whether such packing is necessary for putting the excisable article in the condition in which it is generally sold in the wholesale market at the factory gate. If it is, then its cost is liable to be included in the value of the goods, and if it is not, the cost of such packing has to be excluded." ....

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....ay Engineering Works Ltd. - 1989 (39) E.L.T. 169 (S.C.) has held hat the name plates are essential for marketing of the fan and though "an electric fan may perform its essential functions without affixation of the name plate but that is not enough because electric fan does not become marketable product without affixation of name plate". The learned SDR has relied upon the decision in Siddhartha Tubes case wherein the Supreme Court laid down the law that cost of the process, even if not amounting to manufacture, has to be included since it adds to the intrinsic value of the product. 7. We do not find any substance in the submission of the learned Consultant that no penalty is imposable as issue was not clear to the Government, merely....