TMI Blog2024 (2) TMI 1078X X X X Extracts X X X X X X X X Extracts X X X X ..... goods at the factory gate and inclusion of such forwarding charges to be declared price would lead to differential price of goods. Hence, such forwarding charges cannot be included in the assessable value of goods. In case of UNION OF INDIA ORS. ETC., ETC. VERSUS BOMBAY TYRE INTERNATIONAL LTD. ETC., ETC. [ 1983 (10) TMI 51 - SUPREME COURT] , the Hon ble Supreme Court has held If any special secondary packing is provided by the assessee at the instance of a wholesale buyer which is not generally provided as a normal feature of the wholesale trade, the cost of such packing shall be deducted from the wholesale cash price. These decisions are squarely applicable to the facts of the present Appeals. Therefore, there are no reason to interfere with the detailed findings and conclusion arrived at by the Commissioner (Appeals). The Appeals filed by the Revenue is dismissed. - HON BLE MR. R. MURALIDHAR, MEMBER (JUDICIAL) And HON BLE MR. RAJEEV TANDON, MEMBER (TECHNICAL) Mr. S. S. Chattopadhyay, Authorized Representative for the Appellant Mr. J. P. Khaitan, Sr. Advocate Mr. S. Bhowmick, Advocate for the Respondent ORDER PER R. MURALIDHAR : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry gate could be marketed without secondary packing. Paraphrasing it, if the goods are marketable at the factory gate even without secondary packing, then for goods to be ordinarily sold at the factory gate secondary packing is not essential. Or in other words, if these goods are marketable then the manufacturer can sell all his goods at the factory gate without secondary packing. It is here that the customer enters the scene. If he wants that the goods he has purchased do not suffer any injury during transit to his premises, he can make a request for additional or secondary packing and pay extra for it. Such extra packing at the behest of such customer would not form part of the assessable value. But if the goods cannot be sold and marketed at the factory gate without such secondary packing then its cost would invariable be includible in the assessable value of the goods. 18. In the light of the above law enunciated by the Apex Court, it needs to be further examined whether the cost of wooden crates/cases or gunny bags is required to be included in determining assessable value of goods. At para 5 above, the details of the percentages of goods of the total goods cleared which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e review notice. In a quasi judicial proceeding, like this, the degree of proof required is that of the preponderance of probablitiies. Applying this standard of proof, one finds that in all cases that one has come across, the insistence to use secondary packing was at the instance of the buyers and not at the will of appellant. Hence, I hold that during the material period, secondary packing to the goods was provided at the instance of the buyers. Therefore, the cost of secondary packing will not form part of the assessable value of goods during the whole of the material period. 20. My above decision is fortified by the Tribunal decision in Kesoram Rayon (supra) where it was held that if secondary packing is not essential for marketability of goods, the cost of such packing is not includible. I would also like to refer to the decision of Stallion Shox Ltd. (Supra), which has been relied upon by the lower authority to come to a contra conclusion. The lower authority firstly, erred on facts when he stated that even if 35% of goods are sold in secondary packing, then according to the Tribunal decision, the cost of such secondary packing is includible. The facts of the case narr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the goods. 23. Carrying of goods to a booking station or storage in godown are services which have been provided beyond the factory gate. When the appellant has sold the goods at the factory gate, then such charges which are collected for providing services beyond the factory gate cannot be added to or included in the assessable value. It is not the case of the Department, that the appellant is collecting these as part of the price of the goods and in the guise of forwarding charges. Such a proposition would be contrary to evidence as there is uniform sale price of goods at the factory gate and inclusion of such forwarding charges to be declared price would lead to differential price of goods. Hence, such forwarding charges cannot be included in the assessable value of goods. The lower authority in including such forwarding charges has erred and thus the impugned order on this count is unsustainable in law and on facts. The same is liable to set aside. 24. Summing up, the assessments of the appellant for the period 01.04.1980 to 30.06.2000 are required to be finalized without including the cost of secondary packing and the forwarding charges. Thus, the impugned order da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ton, or biscuits in a paper wrapper or in a tin container, must be regarded as falling within Section 4(4)(d)(i). That is indeed conceded by learned counsel for the assessee. It is the cost of secondary packing which has raised serious dispute. Secondary packing is of different grades. There is the secondary packing which consists of larger cartons in which a standard number of primary cartons (in the sense mentioned earlier) are packed. The large cartons may be packed into even larger cartons for facilitating the easier transport of the goods by the wholesale dealer. Is all the packing, no matter to what degree, in which the wholesale dealer takes delivery of the goods to be considered for including the cost thereof in the value ? Or does the law require a line to be drawn somewhere? We must remember that while packing is necessary to make the excisable article marketable, the statutory provision calls for strict construction because the levy is sought to be extended beyond the manufactured article itself. It seems to us that the 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
