TaxTMI 
TaxTMI 
1997 (2) TMI 99
X X X X Extracts X X X X
X X X X Extracts X X X X
....he same. The assessee is engaged in the manufacture of batteries and torches. These goods are initially packed in small boxes. These small boxes are packed in medium size cartons. The medium size carton are in turn packed in larger corrugated cartons, called "7-ply corrugated cartons". The assessee does not dispute that the value of small boxes and medium size cartons is liable to be included in the value of the goods packed. The dispute is only with respect to the inclusion of the value of 7-ply corrugated cartons. Differing views have been expressed by different Benches of the Tribunal on this question in the case of this very assessee, as would be evident from the fact that while against some orders, the assessee has filed appeals, certa....
X X X X Extracts X X X X
X X X X Extracts X X X X
....one and does not admit of any ambiguity. What it says is that where the goods are delivered in a packed condition, at the time of removal, the cost of such packing shall be included and that only where such packing is of a durable nature and is returnable by the buyer to the assessee, should the cost of such packing be not included in the value of the goods. The concept of primary and secondary packing has, however, been urged by the assessees and recognised to some extent in the decisions of this Court including Bombay Tyre International. While it may not be possible for us to wish away the said distinction, we cannot but remind ourselves that this is a refinement not borne out by the express language of the enactment and must, therefore, ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rom the one enunciated in Bombay Tyre International. 5.The decision in Madras Rubber Factory next referred to the opinions of Sabyasachi Mukharji, J. and S. Ranganathan, J. in C.C.E. v. Ponds (India) Limited [1989 (44) E.L.T. 185 (S.C.) = 1989 (4) S.C.C. 759] and expressed its entire and respectful agreement with the test evolved by Mukharji, J. which reads : "The question is not for what purpose a particular kind of packing is done but the test is whether a particular packing is done in order to put the goods in the condition in which they are generally sold in the wholesale market at the factory gate and if they are generally sold in the wholesale market at the factory gate in certain packed condition, whatever may be the reason for....
X X X X Extracts X X X X
X X X X Extracts X X X X
....est the packed goods against injury or damage rather than to enable it being placed in the market. Indeed, in Godfrey Phillips, this was factual position that had been accepted by the departmental authorities earlier for a period of a little over six years which they later wanted to go back upon." 6.After considering some other cases, the decision in Madras Rubber Factory stated the test in the following words : "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 m....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d by Mukharji and Ranganathan, JJ. in Ponds India Limited, viz., "whether packing, the cost whereof is sought to be included is the packing in which it is ordinarily sold in the course of wholesale trade to the wholesale buyer". While judging the necessity of the packing, what one must see is whether it is necessary for putting the excisable article in the condition in which they are generally sold in the wholesale market at the factory gate and this must be judged from the conduct of the manufacturer himself. Ordinarily speaking, no manufacturer would provide a packing which is not necessary for putting the excisbale articles in the condition in which they are sold in the wholesale market at the factory gate. [Where a special kind of packi....