9911796707
TMI Blog1996 (5) TMI 190X X X X Extracts X X X X X X X X Extracts X X X X ..... nd they were heard together and are being disposed of by a common order. 2. The matter was heard on 22-5-1996, when Shri G. Shiva Dass, the learned Advocate briefly stated the facts. There is no dispute that SCP and M/s. Spencer and Company Ltd. (herein referred as SCL) were related persons for the purposes of Section 4 of the Central Excises and Salt Act, 1944 (the Act). SCP were engaged in the manufacture of various products including Squashes and Syrups and the goods were assessed at the price at which SCL were selling the products in the wholesale market. The learned Advocate stated that the specially designed printed cardboard cartons for stacking 12 bottles in each cartons were supplied by SCL free to them and that its costs sho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is no question of any deduction of the cardboard packing which was a secondary packing and has held by the Hon'ble Supreme Court in the case of Bombay Tyre International Ltd. was includible in the assessable value. 4. We have carefully considered the matter. There is no dispute that SCL was a holding company and SCP was a subsidiary company. In fact, both had the same registered office-769 Anna Salai, Post Box No. 301, Madras-600002; same telex No. same Telephone No., same Telegraphic address, and the same codes. From the letter dated 1-4-1982 of the SCL addressed to SCP, it is seen that earlier they were manufacturing Squashes and Syrups at Mangalagiri where as per agreement between the holding company and the subsidiary company, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are delivered at the time of removal in a packed condition then, the value in relation to any excisable goods includes the cost of such packing except the cost of the packing which is of a durable nature and is returnable by the buyer to the assessee. In this case there is no dispute that the cardboard packing was not a returnable packing and was not of a durable nature. 6. The learned Advocate had submitted that they had not incurred any cost with regard to such packing and therefore, this cost did not enter into their manufacturing cost. The Hon'ble Supreme Court in the case of Union of India v. Bombay Tyre International - 1983 (14) E.L.T. 1896 (SC) in Para 40 of their decision had held that the excise levy could not be confined to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f their decision in the case of Bombay Tyre International (supra) the Hon'ble Supreme Court had held "It seems to us that degree of secondary packing which is necessary for putting the excisable article in the condition in which it is generally sold in the wholesale market at the factory gate is the degree of packing whose goods can be included in the `value' of the article for the purpose of the excise levy. To that extent the cost of secondary packing cannot be deducted from the wholesale cash price of the excisable article at the factory gate". In this case, there is no sale as stipulated in Section 4 at the factory gate and the goods were sold in the wholesale trade only when so sold by SCL, and SCL sold the goods duly packed in the car ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ainers. The Hon'ble Supreme Court had held in that case that packing was not necessary for completion of manufacture of excisable goods. The Hon'ble Supreme Court had held that the cost referred to in Section 4(4)(d)(i) was not cost which was incurred by the assessee i.e. the seller. Further they have referred to the scheme of the Section whereunder durable packing returnable by the buyer has to be excluded. They have held "It would create an absurd situation if durable packing supplied by the assessee and returnable to the assessee is not to be includible in the assessable value but a durable packing supplied by the buyer to the assessee and returnable to the buyer is made a part of the assessable vlaue". In the proceedings before us it is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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