TaxTMI 
TaxTMI 
2006 (5) TMI 293
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....der dated 17-8-89, allowed the deduction on account of the cost of the carton cardboard. Thereupon the appellants filed a refund claim on 6-12-1989 for an amount of Rs. 73,74,515/- being the duty paid under protest for the period from November 1979 to February 1987. The ACCE, vide Order-in-Original dated 20-4-1990, sanctioned the refund after recording the finding that the cardboard packing is only a secondary packing and the polythene packing was the normal packing. No appeal was filed against the Order-in-Original mentioned above sanctioning the refund but in respect of the order dated 17-8-1989 allowing the deduction, the Department filed an appeal. A Show Cause Notice dated 1-10-1990 was issued to recover the refund granted on the ground that it was an erroneous refund. In respect of the appeal filed by the Department against the OIO dated 17-8-1989 allowing deduction, the Commissioner (A), in his order dated 28-2-1991, remanded the matter back to the Asst. Commissioner. A Show Cause Notice dated 4-10-1991 was issued to disallow deduction on the cost of carton packing on the following grounds :- (a) The nature of the packing mentioned in the Pri....
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....ble value. (ii) In view of Law Ministry's opinion dated 31-10-1985, the refund made in pursuance of a valid order of an Asst. Collector cannot be treated as 'erroneous refund'. Erroneous refund refers to refunds made on account of mistaken calculations and technical errors. Reliance is placed on the decision of the Madras High Court in the case of Madras Rubber Factory v. ACCE - 1981 (8) E.L.T. 565 (Mad.). In any case, as the order granting refund has not been challenged and set aside, the same is fatal for further proceedings initiated seeking recovery of the refund already granted. (iii) The appellants filed a Price List in Part-I claiming approval of normal price for refrigerators sold at the factory gate without carton packing. This price list was approved without any revision and without addition of any cost towards the carton package. The above shows that the Department recognizes the existence of a normal price for refrigerator without carton packing. When the department demanded duty on stock transferred clearances on the basis of the prices prevailing at the depot, this tribunal vide Final Order No. 439/2005 dated 28-3-2005 [2005 (191) E.L.T. 11....
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....on the following case laws. (a) LG Industries v. CCE - 2002 (148) E.L.T. 43. (b) Kesar Enterprises Ltd. v. CCE - 2003 (155) E.L.T. 100 (c) Garima Enterprises Pvt. Ltd. v. CCE - 2005 (182) E.L.T. 106. (d) S.K. Gems v. CC - 1999 (105) E.L.T. 208. (e) CCE v. Shankar Novelties Glass Industries - 1991 (51) E.L.T. 144. 5. The learned JDR submitted that the Refrigerator is always delivered after packing in a carton. Relying on the decision of the Tribunal in the case of United Flashlights Industries Pvt. Ltd. v. CCE, Calcutta-I - 2001 (136) E.L.T. 1339 (Tri.-Kolkata), he said that it is the burden of the assessee to establish that wooden packing was not really necessary for putting the goods in the wholesale market at the factory. He said that the Apex Court, in the case of Geep Industrial Syndicate Ltd. v. CCE, Allahabad - 1997 (90) E.L.T. 271 (S.C.) has observed that ordinarily speaking, no manufacturer would provide a packing which is not necessary for delivering the product at the factory gate. 6. We have gone th....
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....he present case also. For the reasons given in the said judgment, the appeal is dismissed." In this context the point to be stressed is that the Order passed U/S 35E(2) does not automatically result in the recovery of the refund. This has to be followed by SCN U/S 11A which should be issued within 6 months from the date of actual refund. Since time limit for filling appeal U/S 35E(2) is longer than the time limit prescribed U/S 11A, the SCN should proceed the proceedings U/S 35E(2). This view has been supported by the opinion of the law Ministry. The Law Ministry vide F.No. 387/78/98-JC has opened thus, "In view of the judgment of the Apex Court in CCE v. Re-rolling Mills [1997 (94) E.L.T. 8] dismissing the appeal preferred by the Department against the CEGAT order, the order passd by the Tribunal on 27-1-1998 in the present case of M/s. Fag Precision Bearing Ltd. reflects the correct legal position. We, therefore, agree with the view of the referring Department that the demand for recovery of erroneous refund has to be made U.S 11A of the Central Excise Act, 1944 within the prescribed limitation period." In view of above it is clarified that timely deman....
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....ourt further observed that a degree of secondary packing which is necessary for putting the excisable article in the condition in which it is generally sold in the wholesale market at the factory gate is a degree of packing whose cost is to be included in the assessable value for the purpose of excise. Therefore, in view of this observation of the Supreme Court it is the degree of secondary packing which is the determining factor whether its cost is includible in the assessable value or not. A packing which may be required for a wholesale market in some remote area is not the secondary packing which is contemplated by the Supreme Court for inclusion in the assessable value of the goods. Thus for example, if the article has to be transported over rough road to reach wholesale market in a remote area it may have to be packed in a special way to protect it from damage. Similarly, if goods have to be transported over water, in order to reach a certain wholesale market, they have to be packed in water-proof packaging. The cost of such packing is not included in the assessable value because as per Supreme Court only such secondary packing which is necessary for the wholesale market at th....