1989 (8) TMI 77 - SUPREME COURT

Whether for determining the assessable value of the excisable goods sold by the assessee in drums or containers provided by its customers the value of such drums/containers would also have to be included on a correct interpretation of charging sections, namely, Sections 3 and 4 of the Act?

Held that:- on the facts of this case, it is clear that the goods were not sold in drums generally in the course of the wholesale trade. There was evidence that 90% of the goods were delivered at the time of removal without being put in drums. There was no evidence that there was any necessity of packing or putting these in drums prior to their sale. It was not necessary that the articles were to be placed in drums for these to be able to generally to enter the stream of wholesale trade or to be marketable. On the other hand, there was evidence that in the wholesale trade, these goods were delivered directly in tankers and deliverable as such. But as a matter of fact, delivery in drums was only to facilitate their transport in small quantities. The manufacture of the goods was complete before these were placed in drums. The completely manufactured product was stored in tanks. From these tanks the goods were removed directly and placed in vehicles for their movement - for 90% of the sales, the vehicle of removal was tankers and 10% of the sales, the vehicle of removals was drums. In the premises, the value of the drums with regard to the fusel oil/styrene monomer irrespective of whether these were supplied by the assessee or not, are not includible in the assessable value of the Styrene Monomer.

Appeals have to be allowed and the orders of the Tribunal set aside. The Tribunal was in error in holding that as at the time of removal, goods were delivered from the factory in packed condition and the containers were not returnable to by the buyer, the value of the drums is to be included. It is reiterated that in order to be deliverable, it is not necessary that the goods should be delivered in packed condition and that the containers were not necessary to make the goods marketable.