1991 (8) TMI 112

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..... By the Order dated 26th June, 1981 (Annexure "G"), the Assistant Collector, Central Excise, Bhavnagar, rejected the petitioner's application not to include the value of the tin containers in assessable value of vegetable products on the ground that the packing or putting vegetable product in tin containers could not be said to be process incidental or ancillary to the completion of manufactured product. It was rejected on the basis of Section 4(4)(d)(i) of the Central Excises and Salt Act, 1944 as there was no understanding between the manufacturer and the customers or dealers, express or implied, to the effect that packing material (tins) is to be returned to the manufacturer so that it can be used again for packing the product. 3. By....

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....on commission basis. Therefore, no facts are stated or alleged by the petition before the Assistant Collector that the petitioner is giving trade discount in accordance with the normal practice of the wholesale trade at the time of removal in respect of such goods sold or contracted for sale. Hence, in our view, the petitioner is not entitled to the benefit of Section 4(4)(d)(ii) which inter alia provides that for determining the value of excisable goods the trade discount (such discount not being refundable on any account whatsoever) allowed in accordance with the normal practice of the wholesale trade at the time of removal in respect of such goods sold or contracted for sale, is not to be included. The Assistant Collector, therefore, rig....

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....on manufacturer has to prove that the packing is of durable nature. He has further to prove that it is returnable by the buyer to the assessee. There is no evidence on record that there was agreement between the assessee and the buyer that packing material, i.e. the tins were returnable by the buyer to the assessee. Apart from the section itself being very clear, this question is also covered by the decision of the Supreme Court in the case of K. Radha Krishnaiah v. Inspector General, Excise Gooty, 1987 (27) E.L.T. 598 = AIR 1987 S.C. 1774. In that case the Court has held that unless there is an arrangement between the assessee and the buyer that packing shall be returned, it cannot be said that packing is returnable. The relevant observati....