TaxTMI 
TaxTMI 
1984 (11) TMI 323
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....d Products, respondent in Appeal No. 421/79-A filed nine price lists during the year 1978-79 on different days before the Assistant Collector, Central Excise, Hyderabad, claiming deduction of what they said to be secondary packing expenses from the assessable value of the biscuits manufactured by them. M/s. Ampro Food Products filed a consolidated price list for the excisable products manufactured by them. for the year 1978-79 in Part I for determination of value under Section 4 of the Central Excises and Salt Act, 1944 (hereafter referred as the Act). In Column 9 of the said price list, against Sl. Nos. 1 to 24, the assessee showed certain amounts against the abbreviation "S.P." which was claimed to mean secondary packing. The amount shown in Col. 10 against this alleged secondary packing represented the value of the material comprising corrugated board boxes or tins which formed the outer container within which smaller packets of biscuits are kept. In respect of Jivan Food Products also the cost of secondary packing claimed for deduction represented the cost of material comprising corrugated board boxes or tin containers forming the outer container within which similar packets of....
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.... which he had approved on 19-10-1978 and 23-12-1978 with other five varieties of biscuits mentioned in the price list dated 28-3-1978. If he finds that in respect of quality and packing the five varieties mentioned in the aforesaid three price lists are identical, then the deduction on account of cost of secondary packing should be allowed, for the reasons and in view of the circumstances recorded in the Order-in-Appeal No. 169/78, dated 3-10-1978." 4. It is these two orders in appeal which the Central Government sought to review and therefore issued notices under Section 36(2) of the Act. Both these matters were posted for hearing after 30th October, 1984. None was present on behalf of either party. Earlier too none was present when these appeals were posted. We, therefore, consider the matter on the basis of existing records which we perused in detail. We also heard Shri Mahesh Kumar, the learned representative for the appellants. 5. The facts of the case show that the issue involved here is whether or not the tin containers etc. in which the biscuits are packed constitute secondary packing or not. In somewhat identical replies to the notices issued by the Government ....
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....in assessable value if such packing was not of permanent nature and is returnable by the buyer to the assessee. (The respondents were obviously referring to the durable nature and returnability mentioned in Section 4(4)(d)(i) of the Act. They relied on several judgments of the High Courts in support of their arguments. These judgments are as follows :- 1. Malwa Vanaspati and Chemical Co. Ltd., Indore v. Union of India (1979 E.L.T. 243). 2. Geep Flash Light Industries Ltd., Allahabad v. Union of India (1979 E.L.T. 391). 3. Alembic Glass Industries Ltd. v. Union of India and Others (1978 E.L.T. 444). 4. Indo-National Ltd. v. Union of India & Others (1979 E.L.T. 334). 8. In sum, the respondents' argument is that their goods (biscuits) were fully manufactured without packing and the cost of packing is neither manufacturing cost nor manufacturing profit on which excise duty can be levied. Further, even if reference is made to Section 4 of the Act only initial or primary packing can be included and not the secondary packing. As summed up by the respondents, primary packing in their case consisted of packing in polythene paper, etc. while secondary packing consisted of container....
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....gment in what is known as Voltas case. However, the position has substantially changed since the respondents in these appeals submitted their replies to the Government's Show Cause Notices. This change has been the result of the judgment of the Supreme Court in the matter of Union of India and Ors. etc. v. Bombay Tyre International Ltd. etc. (1983 E.L.T. 1896). This judgment considered several aspects of Section 4 but insofar as the present appeals are concerned, paragraph 51 thereof is relevant. It is in ".......It is relevant to note that the packing, of which the cost is included, is the packing in which the goods are wrapped, contained or wound when the goods are delivered at the time of removal. In other words, it is the packing in which it is ordinarily sold in the course of wholesale trade to the wholesale buyer. The degree of packing in which the excisable article is contained will vary from one class of articles to another. From the particulars detailed before us by the assesses, it is apparent that the cost of primary packing, that is to say, the packing in which the article is contained and in which it is made marketable for the ordinary consumer for example a tube of t....