TMI Blog2010 (7) TMI 21X X X X Extracts X X X X X X X X Extracts X X X X ..... ketable. The additional packing in the nature of a secondary packing was done for the purpose of convenience of the up-country customers in the transportation of the goods manufactured by the assessee. We, therefore, hold that the cost of secondary packing in hessian cloth cannot be included in the value of the goods in terms of Section 4(4)(d)(i) of the Act for the purpose of assessment of excise duty. - Regarding period of limitation beyond one year for filing of refund claim, SC has rendered no opinion. - 3403 OF 2003 - - - Dated:- 23-7-2010 - JUDGMENT D.K. JAIN, J. 1. This appeal, by special leave, is directed against the judgment and order dated 10th July 2002, passed by the High Court of Judicature at Bombay, whereby the High Court has dismissed the writ petition filed by the appellant (for short "the assessee") and affirmed the order passed by the Assistant Commissioner of Central Excise, Bombay-II ("the Adjudicating Authority" for short), rejecting the claim preferred by the assessee for refund of the excess amount of excise duty paid by them as time barred as also on merits on account of disallowance of post manufacturing expenses for the purpose of valuation of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... othing special about such packing so as to exclude its cost from the value of the fabric. The Adjudicating Authority also held that the refund claim was barred by time. 3. On rejection of the claim, the assessee amended the writ petition in order to challenge the validity of order dated 12th April 1984. As stated above, the order of the Adjudicating Authority has been affirmed by the High Court. Rejecting the plea of the assessee that additional packing of three rolls of fabric in hessian cloth was done at the specific request of the up-country customers in order to protect the packed fabric from damage during the course of transportation and, therefore, at least the cost of such secondary packing should be excluded from the assessable value, the High Court held as follows: "...in view of the clear finding given by the adjudicating authority to the effect that the Assessee has been uniformly using hessian cloth for all the delivery to the up-country customers, irrespective of any specific request, the use of hessian cloth as secondary packing has to be held to be normal packing which are offered to the wholesalers at the factory gate. In view of the clear finding given by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the decision of the High Court, submitted that in view of the finding by the Adjudicating Authority, affirmed by the High Court to the effect that hessian cloth was the standard packing for the fabric for sale in the wholesale market, its cost was includible in the value of the goods in terms of Section 4 of the Act. 9. The short question arising for consideration is whether the cost of packing of fabric in hessian cloth, which, according to the assessee, is not required for sale of their goods at the factory gate and is necessitated to protect the fabric from damage during the course of transportation to up-country customers is includible in the assessable value of the coated fabric manufactured by the assessee for the purpose of levy of excise duty? 10. Section 4 of the Act, in so far as it is relevant for our purpose, reads as follows: "4. Valuation of excisable goods for purposes of charging of duty of excise.--(1) Where under this Act, the duty of excise is chargeable on any excisable goods with reference to value, such value shall, subject to the other provisions of this section, be deemed to be-- (a) the normal price thereof, that is to say, the price at which suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gate which would be includible in the value of the goods and not the cost of any additional or special packing. 13. In Union of India Ors. Vs. Godfrey Philips India Ltd.{(1985) 4 SCC 369}, a question arose as to whether the cigarettes manufactured and packed in cardboard packets, each containing 10 to 20 cigarettes and those packets were packed in corrugated fibreboard cartons/containers, the cost of corrugated fibreboard containers was liable to be included in determination of the value of the cigarettes for the purpose of excise duty. The majority view was that since the corrugated cartons were employed as secondary packing only for the purpose of avoiding damage or injury during transit and were not necessary for selling the cigarettes in the wholesale market at the factory gate, their cost was not to be included in the value of the cigarettes for the purpose of levy of excise duty. 14. In Geep Industrial Syndicate Ltd. Vs. Union of India{1992 (61) E.L.T. 328 (S.C.)}, the assessee was manufacturing batteries and torches. The torches and batteries manufactured by them were first packed in polythene bags and then these polythene bags were placed in cardboard cartons. The ca ..... X X X X Extracts X X X X X X X X Extracts X X X X
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