TMI Blog1980 (6) TMI 33X X X X Extracts X X X X X X X X Extracts X X X X ..... material and post-manufacturing expenses cannot be included in the value chargeable to excise duty. 2. The Petitioners are manufacturers of preparations known as Lacto Calamine lotion and Lacto Calamine talcum powder which are subject to payment of excise duty under Item 14F of the Tariff to the Act on ad valorem basis. The procedure followed by the Petitioners is to pack the preparation in a consumer pack at the production bench and store in ordinary cardboard cartons in the case of Lacto Calamine lotion and wooden crates in the case of Lacto Calamine powder in the bonded warehouse of the Petitioners without payment of excise duty. Under the price list which is submitted by the Petitioners to the Excise authorities and also circulated t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been worked out and accordingly approved. 4. This view of the Assistant Collector was challenged by the company by an appeal before the Appellate Collector, Customs and Central Excise, Bombay. It was contended before the Appellate Collector that packing, forwarding and distribution work was done in duty paid premises after the goods were removed from the store room which meant the bonded warehouse or the bonded store room. The Collector held that under the amended provisions of Section 4 of the Act there was no provision for abatement of distribution or forwarding charges. He took the view that even the expenses of packing can be excluded only if the packing is of durable nature and is returnable to the manufacturer and it was not so in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of India and Others, 1979 (4) E.L.T. (J 468). Both these decisions were considered in great detail by a Bench of this Court to which one of us (myself) was a parry in Special Civil Application No. 2118 of 1976, The Associated Bearing Co. Ltd. and Another v. Union of India and Another decided on 5th March 1980 [1980 (6) E.L.T. 415]. In that decision it has been expressly held that packing costs and costs of packing material cannot be included in the cost of the manufactured article for the purposes of liability to excise duty. 6. Strictly speaking, on this short ground the view taken by the Appellate Authority and the Assistant Collector must fall to the ground. It is obvious that the only question which was before both these authoritie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nded warehouse or from the factory is the basic trade price disclosed in the price list. It is obvious, therefore, that the 5% extra charge is at the discretion of the wholesaler and cannot form a part of the basic trade price. The averments in the petition show that this charge is collected from the wholesaler if he so desires that an additional packing should be made and that this is done only when the delivery is given at the duty paid warehouse. These averments do not seem to have been disputed because there is no return filed on behalf of the authorities in this case. We must, therefore, proceed on the footing that the occasion to charge 5% extra packing and forwarding charges arises only after the goods have reached the duty paid ware ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cted to a liability to which they could not have been under the law. The view taken by the Assistant Collector and the Appellate Collector is clearly contrary to law and their orders are liable to be quashed. 8. Consequently, the petitioners will be entitled to the refund of excise duty collected on the footing that the 5% of the price was liable to be included in the basic trade price for the purposes of excise duty. It will be open to the petitioners to approach the appropriate authorities for a refund of the excess duty recovered on the basis indicated earlier. Since the amount has been recovered almost five years back, we expect that the appropriate authorities will deal with the matter expeditiously preferably within a period of two ..... X X X X Extracts X X X X X X X X Extracts X X X X
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