2016 (10) TMI 1174

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....d their cross-objections. 2. Brief facts of the case are that the respondents were receiving packing material viz. corrugated cartons from their buyer M/s Dabur India Ltd. on free of cost basis for use in packing of PET bottles/jars manufactured by them. While selling their goods viz. PET bottles/jars to M/s Dabur India Ltd., the assessee had not included the cost of such packing material received free of cost in the transaction value. Revenue issued a show cause in terms of Rule 6 of Central Excise Valuation Rules, 2000, alleging that the cost of such packing material supplied free of cost is to be treated as additional consideration flowing from the buyer to the assessee in relation to sale of the goods. The matter was adjudicated a....

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....spondents submits that the cartons supplied by buyer free of cost are meant only for carrying the excisable goods manufactured by the respondents and hence their value cannot be included in the value of excisable goods since the cartons do not render their manufactured goods as marketable. Relying upon the judgment of Bombay High Court in the case of Tata Motors Ltd. v. UOI - 2012 (286) E.L.T. 161 (Bom.), she argued that the amended provisions of Section 4 are not materially different from the provisions of this Section prior to 1 July 2000. She relied upon the following case laws : (i)      CCE, Indore v. Grasim Industries Ltd. - 2014 (304) E.L.T. 310 (Tri.-Del.) (ii)    Shakti Organic Chemical Ind....

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....the time of sale or at any other time, including, but not limited to any amount charged or to make provision for, advertising or publicity, marketing and selling organization expenses, storage, outward handling, servicing, warranty, commission or other matters, but does not include the amount of duty of excise, sales tax and other taxes, if any, actually paid." 5.1 In our view, the words "any amount that the buyer is liable to pay to or on behalf of assessee for the reason of or in connection with sale", would cover the amount paid or payable by the buyer for the goods, only for the expenses which contributed to the value of the goods or are necessary to make the goods marketable and this expression would not include the amounts paid ....

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....by the customers/buyers The above judgment has been followed by the Apex Court in the cases of Jauss Polymers Ltd., reported in 2003 (157) E.L.T. 626 (S.C.) and CCE v. Superior Products, reported in 2008 (230) E.L.T. 3 (S.C.). Though these judgments are in respect of the provisions of Section 4 of Central Excise Act, 1944, as it stood during the period prior to 1-7-2000 and in which clause (d)(ii) of Section 4(4) was about packing charges, while Section 4 w.e.f. 1-7-2000 and the definition of "Transaction Value" in it, is totally silent about the packing charges, in our view the principle laid down by the Apex Court in cases of Hindustan Polymers (supra), Jauss Polymers Ltd. (supra) and CCE, v. Superior Products (supra) is also applicable ....