TMI Blog1999 (4) TMI 406X X X X Extracts X X X X X X X X Extracts X X X X ..... outside the factory. As required under the provisions of Rule 173C, the appellants filed a price-list effective from 16-11-1993 to 31-3-1994, claiming the various deductions on account of various factors. The appellants jurisdictional Assistant Commissioner issued a show cause notice dated 7-7-1994 to the appellants proposing to disallow deductions claimed by the appellants on account of insurance, cash discount and packing charges. The insurance deduction was proposed to be denied on the ground that the expenses incurred by the appellants on account of insurance charges were paid for insurance policies covering the risk of fire, damage of goods stored in sale depots etc. However, the non-admissibility of these deductions was admitted by the appellants before the Assistant Commissioner as is recorded in the order-in-original as also in the order-in-appeal. Hence this does not form a subject matter of appeal before us. Further, deduction on account of secondary packing was proposed to be denied in the show cause notice on the ground that the wooden cases were required to put the excisable articles in the condition in which it is generally sold in the wholesale market at the factor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctory for storing in the sales depot and this quantum of bonus under dispute can be ascertained at the end of the year. They have, further, claimed that they have no hesitation to say that the bonus vis-a-vis the cash discount, is in the nature of trade discount which has no relation whatsoever, to the value of the articles sold and consequently, it falls within the expression, post-manufacture/ post-removal expenses . I find that there may not be any second opinion about the proposition that the discount by whatsoever name it may be known as, is an admissible deduction provided it satisfies all the criteria of being a discount required to be deducted from the assessable value. For such discount to be deducted from the assessable value, it is necessary that the same should be made known to the wholesale dealers at the time of sale though the actual quantum is to be passed on to them at a later stage. In the instant case, the appellants have not produced any evidence on record to show that their dealers were aware of the terms and conditions of the discount which would be given to them on fulfilment of certain conditions. As rightly observed by the Commissioner (Appeals), no policy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the cost of such secondary packing in wooden boxes is not includible for determination of the value of batteries and torches as the cartons are placed in wooden boxes only at the time of delivery at the factory gate for the safe transportation. The fact that in the instant case, there is no factory gate-sale and the entire goods are cleared to the depots from where they were further sold to the various wholesale dealers, will not make any difference; rather what is important is that that type of packing which is necessary for putting the goods in wholesale market is required to be included in the assessable value. It has been found, as a matter of fact, in the above decision of the Supreme Court that wooden boxes are not required for putting the torches in the wholesale market, but are for the purposes of protecting the torches and sales against injury or damage during transport and that packing in wooden boxes was not necessary for putting the torches in the condition in which they are generally sold in the wholesale market at the factory gate. It is also a fact in the instant case that 40% of the goods from the first sale-point i.e. depot-sales, is cleared without such a wo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the appeal. In other words, there is no option for the customers of the appellant firm to opt and pay for extra wooden packing, if normal packing for putting the goods in the wholesale market at the factory gate does not suit their requirement. 9.3 Conversely, even if a customer takes goods in cardboard cartons, he has to pay for the average element of wooden packing as well, because prices declared are all inclusive as mentioned above including wooden packing. 10. Learned Consultant, Shri S.P. Ghosh for the appellant firm has urged that Supreme Court s two judgements in the case of Geep Industrial Syndicate, mentioned supra, are fully applicable to the appellants herein because the excisable product is the same, namely torches. If the wooden case was not considered a necessary packing for putting the goods in the wholesale market at the factory gate in the case of Geep Industrial, it should not be considered so in the appellants case as well. 11. Learned S.D.R. on the other hand, has urged that on the doctrine of precedent, it is the ratio decidendi of a case which is applicable in a subsequent case and not a finding of fact. Apex Court in the later case of Geep Industri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cluded in the assessable value. 13.1 I have considered the pleas advanced from both sides. I agree with the learned S.D.R. that finding of fact by the Apex Court that wooden case was not a necessary packing in the two cases of Geep Industrial was not the true ratio of Apex Court s judgements in the said two cases. True ratio regarding inclusion or not of cost of packing has been laid down in para 7 of the report [1997 (90) E.L.T. 271 (S.C.) = 1997 (69) ECR 232] as follows :- .....While judging the necessity of 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 excisable articles in the condition in which they are sold in the wholesale market at the factory gate.........Therefore, one can proceed on the footing that whatever packing is provided at the time of delivery of the goods at the gate is the packing necessary for the purpose of putting the excisable articles in the condition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re, hold that the appellant-assesee firm has not been able to discharge the burden cast upon it in terms of the Apex Court s ruling extracted above. 14.1 In respect of the other claims, I agree with findings of the learned Judicial Member who has dismissed the same. 14.2 I, therefore, dismiss the appeal. Sd/- (Archana Wadhwa) Member (J) Dated 13-11-1997 Sd/ (P.C. Jain) Member (T) THIRD MEMBER DECISION 15. [Order per : G.R. Sharma, Member (T)]. The point of difference in the present case is - Whether in the facts and circumstances of the case, the packing charges on account of wooden boxes as claimed by the appellants herein are includible in the assessable value of the torches or not, on the basis of evidence on record? 16. The facts of the case have been curled out in the Order of the Member (Technical) in detail. Therefore, to avoid repetition, the same are not being reproduced. 17. Shri S.P. Ghosh, learned Consultant appearing for the appellants who reiterates the points made before the Bench, submits that their case is fully covered by the judgment of the Apex Court in the case of M/s. Geep Industrial Syndicate Ltd. v. Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efers to para 5 of the judgment of the Apex Court in the case of Geep Industrial Syndicate v. Collector of Central Excise, Allahabad and submits that in this para, the Apex Court had made observations on Collector of Central Excise v. Ponds (India) Ltd. reported in [1989 (44) E.L.T. 185 = 1989 (25) ECR 457 (S.C.)], which reads as follows :- 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 such packing, the cost of such packing would be includible in the value of the goods for assessment to excise duty.......The correct position seems to be that the cost of that much of packings, be they primary or secondary, which are required to make the articles marketable would be includible in the value. How much packing is necessary to make the goods marketable is a question of fact to be determined by application of the correct approach. 20. Learned SDR submi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sale or a few sales are effected to wholesalers at the factory gate of goods packed in corrugated cases and not packed in wooden boxes, it cannot be said that the goods are ordinarily sold in such packing to the wholesalers at the factory gate. Admittedly, 35% of the sales to wholesalers at the factory gate are of goods packed in wooden boxes and the remaining sales are to the wholesalers at the factory gate of goods not packed in wooden cases. Considering the sale pattern of the manufacturer in this case, going by the percentage of sales, it has to be held that ordinary sale is of goods packed in corrugated cartons which are in turn packed in wooden cases. In other words, generally speaking it is only in that condition of packing that goods are ordinarily sold in the wholesale trade at the factory gate and from this perspective, it has to be stated that packing in wooden boxes is necessary to make the goods marketable in the wholesale trade at the factory gate. 22. Learned SDR submits that in the instant case, 40% of the goods are packed in wooden boxes and therefore, the facts in this case, more or less, are similar to the facts dealt with by the Tribunal in the case of S ..... X X X X Extracts X X X X X X X X Extracts X X X X
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