TMI Blog2005 (3) TMI 123X X X X Extracts X X X X X X X X Extracts X X X X ..... ve been used and would be superfluous. What is required for attracting applicability of the exclusion clause in Section 4(4)(d)(i) is that the packing must be returnable by the buyer to the assessee on the basis of an arrangement between the buyer and assessee under which packing is returned by the buyer to the assessee. Coming to the question of limitation it is to be noted that there is a conceptual difference between "levy'' and "collection''. The difference between levy and collection was noticed with reference to Section 3 of the Act which is the charging provision. It was held that levy and collection are two distinct and separate steps. When the High Court had stayed only the recovery/collection there was no question of any stay on the levy. Appeal dismissed. - 7313-7421 of 1999 - - - Dated:- 11-3-2005 - Ruma Pal, Arijit Pasayat and C.K. Thakker, JJ. [Judgment per : Arijit Pasayat, J.]. - The Revenue is in appeal against the judgment rendered by the Customs, Excise Gold (Control) Appellate Tribunal, Bench, Calcutta (in short the 'CEGAT'). Since there was a difference of opinion between the Member (Judicial) and the Member (Technical), the matter was referred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in loose condition without any packing whatsoever at the factory gate. It is also the assessee's contention that even where the packing materials are being provided by it at the behest of the buyer, the same is invariably durable and returnable justifying its non-inclusion in the assessable value. Its price-lists were approved without the inclusion of packing charges, though these charges were reflected in the price-list depending upon the type of packing the customer opted for. 3.A show cause notice dated 31-12-1970 was issued by the Department raising demand of duty on packing undertaken by the assessee during the period from 1st January to 31st March, 1974. Thereafter further show cause notices (111 in total) were issued on the allegation that the assessee had not included the packing charges in the assessable value of its final product. The show cause notices covered period upto 14-11-1975. The show cause notices and subsequent demands made on the assessment memorandum of RT-12 Returns were the subject matter of challenge in Writ Petition No. 5002(W) of 1980 before the Calcutta High Court, wherein the assessee challenged the attachment of its goods by the Department by let ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uthority held that it was provisional and, therefore, concluded that the notices were within time. The conclusion of the appellate authority that the interim orders passed by the High Court were understood by the parties as if there was a restraint on issuance of the show cause notice is clearly erroneous. As the factual situation shows, out of the total number of show cause notices (111 notices) only 24 notices were barred by limitation and if revenue understood that there was restraint on issuing show cause notices, it could not have issued 77 notices. The interim orders related to realization and not levy. On merits it was submitted that the goods are not generally sold in the packed condition at the factory gate. Packing of the bottles in straw, gunny bags, cardboards or wooden boxes/crates, depend upon choice of the respective customers who either provide the packing materials themselves or ask the assesses to do the job on their behalf. Packing suggested by the customers was to ensure safe transportation of goods and to avoid loss of damage during transit. Different rates were quoted for different modes of packing on the basis of the orders placed by the customers specifying ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the CEGAT's view on the question of inclusion of packing charges runs counter to the clear language of Section 4(4)(d)(i) and various decisions of this Court. It is not a requirement in law that the goods at the factory gate should be on marketable stage. It clearly provides that where under the Act duty is chargeable on any excisable goods, the normal price is deemed to be the price at which such goods are ordinarily sold by the assessee to buyers in the course of wholesale trade for delivery at the time of removal, where the buyer is not a related person and price is the sole consideration of the sale, where the goods are delivered at the time of removal in a packed condition includes the cost of such packing except the cost of packing which is of a durable nature and is returnable by the buyer to the assessee. The minority view of CEGAT was that the goods to be marketable is not a part of the requirement of the relevant provision. That is the correct view. Further, onus is on the assessee to prove that the packing is of a durable and returnable nature and have to be returned by the buyer to the assessee. There are only a few instances where is it has been returned. Further, f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for movement inside the factory of the assessee the requirement of packing the articles in question was there. Reliance was placed on three orders passed by the Government of India in which the revisional authority held that articles were marketable in the loose condition. Though they related to periods prior to amendment of Section 4(4) the factual position did not change. The crucial expression used in Section 4(4)(d)(i) is "returnable'' and not ''returned''. Large number of documents by way of illustration were pressed before the CEGAT to show that the articles were of durable nature and were returnable. The CEGAT has rightly placed reliance on them to conclude in favour of the assessees. 8.Section 4 (4)(d)(i) which is the relevant provision reads as under : "Section 4 : Valuation of excisable goods for purposes of charging of duty of excise :- Where under this act, the duty of excise is chargeable on any excisable goods with reference to value, such value, shall subject to the other provisions of this section, be deemed to be - (a) the normal price thereof, that is to say, the price at which such goods are ordinarily sold by the assessee to a buyer in the course of wholes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was held that thus a strict construction must be put upon the said provision. It was held that only the cost of packing which was required to make the goods marketable would be includible in the value of goods. It was held that if any additional or special packing is provided, which packing is not generally required or provided as a normal feature, then the cost of such packing need not be included in the value of goods. The test which was laid down was that it is only the cost of packing ordinarily required for selling the goods in the course of wholesale trade to a whole buyer which would be includible and not the cost of any additional or special packing. 11.Aforesaid position was noted in M/s. Hindustan Safety Glass Works Ltd. case (supra). 12.In Government of India v. Madras Rubber Factory, 1995 (77) E.L.T. 433, it was, inter alia, held as follows : "The test is : whether packing, the cost whereof is sought to be included is the packing in which it is ordinarily sold in the course of a wholesale trade to the wholesale buyer. In other words, whether such packing is necessary for putting the excisable article in the condition in which it is generally sold in the wholesale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is the determining factor because in that event, the words "by the buyer to the assessee'' need not have been used and would be superfluous. What is required for attracting applicability of the exclusion clause in Section 4(4)(d)(i) is that the packing must be returnable by the buyer to the assessee on the basis of an arrangement between the buyer and assessee under which packing is returned by the buyer to the assessee. 15.In Mahalakshmi Glass Works (P) Ltd. v. Collector of Central Excise [1988 (36) E.L.T. 727 (S.C.)] it has been held that under Section 4(4)(d)(i) the costs of packing which is of durable and returnable nature is to be excluded. There must be an arrangement between the buyer and the assessee that the packing be returned to the assessee. The question whether the packing is actually returned or not has no relevance. The view in Mahalakshmi Glass Works case (supra) was affirmed in a recent case by this Court. (See Triveni Glass Ltd., Allahabad v. Union of India and Ors. [2005 (2) Supreme 191]. 16.Coming to the question of limitation it is to be noted that there is a conceptual difference between "levy'' and "collection''. This point was highlighted by this Court i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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