TMI Blog1980 (4) TMI 111X X X X Extracts X X X X X X X X Extracts X X X X ..... from the market. They are wrapped round the wooden boxes in which their glass products are packed. In regard to wooden containers, the petitioners applied on 21st May, 1975 for a licence in pursuance of Item 68 in the First Schedule to the Central Excises and Salt Act, 1944. They were given the modified licence on 1st September, 1975. The factory manufacturing glass products and the factory manufacturing wooden containers were segregated and it was only in pursuance of that segregation that the modified licence was granted to the petitioners. 2. In these two petitions, the questions which have been raised by the learned Advocate General on behalf of the petitioners are as follows : 1. | | Whether the value of the wooden containers an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal against that order before the Collector of Central Excise. On 10th May, 1978, the Collector of Central Excise dismissed the appeal and confirmed the order made by the Assistant Collector. That appellate order is also challenged in these petitions. The petitioners have filed the revision application before the Central Government against the appellate order which is still pending. 5. It appears that for the period following 1st of October 1975, 12 such orders were made. They are collectively at Annexure `G'. They are also challenged in these petitions. 6. So far as the wooden containers are concerned, indeed the petitioners have been manufacturing them. It appears that they have been paying excise duty on them under Item 68 in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ist. 9. We have expressed a similar view in Special Civil Application No. 78/ of 1976 decided by us on 15th April, 1980. It was a case of packing material in which cigarettes were packed. 10. Applying the principles laid down by using the aforesaid three decisions, we are of the opinion that the value of wooden containers into which petitioners' glass products are packed, cannot form a part of the value of their glass products. Therefore, the petitioners are not liable to pay excise duty under Item 23A on the value of their wooden containers. It does not make any difference whether wooden cases in such cases are purchased from the market or are manufactured by the manufacturer himself. In either case, they do not form a part of manufact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heir branch offices or depots), then the petitioners are entitled to the deduction of trade discount from the value of their products because it is the actual value of such products which reflects the manufacturing costs and manufacturing profits of the petitioner. However, the petitioners shall not be entitled to claim deduction from the value of their glass products if they allow trade discount to their branches and depots and do not pass it on to their wholesale purchasers. 13. In that behalf, we may refer to sec. 4 (4) (d) of the Central Excises and Salt Act, 1944, which, inter alia, provides as follows : " `value' in relation to any excisable goods - ***** (ii) does not include the amount of the duty of excise, sales tax and ot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... harges will form a part of the assessable value of the glass products and the petitioners would be liable to pay excise duty on such higher value. 15. We then turn to grinding charge and hole charges. Grinding process is applied to sheet glass in order to round up its corners or edges so as to ensure its smooth use. It is the petitioners' case that grinding process is not applied to all its products. It is applied only when a purchaser demands it to be done. Similarly, charges for boring holes in glass sheets are also recovered when a wholesale purchaser requires the petitioners to bore holes in glass sheets. The learned Advocate General who appears on behalf of the petitioners has very strenuously contended that grinding and hole-making ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f those glass-sheets, to which they have been applied. They form a part of manufacturing process of those glass-sheets to which they have been applied. Their marketability depends upon the application of those processes. In our opinion, therefore, the Central Excise authorities were justified in including in the assessable value of the petitioners' glass products charges recovered by them from their wholesale buyers for having applied grinding and hole-making processes. 16. In the result, the impugned order cannot be sustained. Central excise authorities will have to reassess the value of the petitioners' excisable goods in the light of the principles which we have laid down in this judgment. The petitions partly succeed. The impugned ord ..... X X X X Extracts X X X X X X X X Extracts X X X X
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