TMI Blog1980 (2) TMI 82X X X X Extracts X X X X X X X X Extracts X X X X ..... d)(i) of the Central Excises and Salt Act, 1944. 3. Section 4 in the present shape in the Act was inserted by Act No. 22 of 1973 and came into force on 1st October 1975. Section 4 (1) of the Act makes the duty of excise chargeable with reference to the value of excisable goods. Section 4(4)(d)(i) provides that the value in relation to any excisable goods "where the goods are delivered at the time of removal in a packed condition, 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". By notification dated 9th January 1976 issued under Rule 8(1) of the Rules made under the Act, the Central Government exempted grey portland cement from so much of the dut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 'E'. The petitioner has paid the duty also on that part of the value which represented the cost of packing under protest for the period from 30th October 1975 to 8th January 1976. The petitioner has not paid any such duty for the period from 1st October 1975 to 29th October 1975. 6. Learned counsel appearing for the petitioners first contends that section 4 (4) (d) (i) of the Act in so far as it provides for inclusion in the value the cost of packing is ultra vires and void on the reasoning that packing is not embraced in manufacture or production and excise duty can be levied only on goods manufactured or produced in India. The second contention of the learned Counsel is that even assuming that Section 4 (4)(d)(i) is valid, the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns as may be specified in its order. Clause 5 of the order which controls the price enables the Central Government to fix charges for packing. The price of cement was fixed by the Government of India (Ministry of Industry and Civil Supplies) by order dated 1st October, 1975. This order is Annexure-B in Misc. Petition No. 704 of 1976. It is stated therein that the charges for packing one metric tonne of cement in 20 new as well as old bags in the ratio of 50 and 50 per cent respectively for the period from 1st October 1975 to 31st December 1975 will be Rs. 40 98. It is further mentioned therein that the serviceable second-hand jute bags may be collected by the Bag Collecting Agents of the respective cement factories and the resale price for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n that the Directorate refused to pay excise duty on the cost of packing as part price of cement and advised the cement factories to claim refund from excise authorities. 8. In the impugned orders of the Assistant Collector in Misc. Petition No. 363 of 1976 the benefit of exception is not given to the petitioner on the ground that it is not ascertainable at the time of assessment and clearance whether the same packing material is returned to the assessee and the cost is refunded. In Misc. Petition No. 704 of 1976 the benefit of exception was disallowed on the ground that though gunny bags are of durable nature, they are not returnable by the buyer to the party who collects them from open market through their authorised agent. 9. The ben ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and they have statutory sanction of the Cement Control Order and the parties are bound by them in the same manner as by terms mutually agreed. Under these directions the purchasers have the right to return the bags in serviceable condition to the factories directly or through their collecting agents and to get refund or adjustment of the packing charges or payment of the value of the packing returned. Thus these directions make the packing returnable by the buyer to the assessee within the meaning of section 4 (4) (d) (i). This conclusion is further supported by the invoice (Annexure B), Circular (Annexure C) in Misc. Petition No. 363 of 1976 and the letter of the Director General of Supplies and Disposals (Annexure-C) in Misc. Petition No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the petitioners are in no case entitled to refund is not acceptable. It is not disputed that the duty on the cost of packing was paid by the petitioners under protest. If the petitioners are not liable to pay duty, they are also not liable to recover it from the parties to whom they sold the cement. The purchasers from the petitioners are entitled to recover that amount from them. The learned Standing Counsel for the respondents relied upon a judgement of the Bombay High Court The Ogale Glass Works Ltd. v. Union of India and others in support of his submission that justice does not lie on the side of the petitioners in seeking refund. It does not appear whether in that case the petitioner had paid the duty under protest. When the petition ..... X X X X Extracts X X X X X X X X Extracts X X X X
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