GEEP INDUSTRIAL SYNDICATE LIMITED Vs. UNION OF INDIA

JUDGEMENT

(1.) The short question that arises for determination in this appeal is whether the cost of secondary packing in wooden boxes is liable to be added in determination of the value of batteries and torches for the purpose of excise duty. The torches and batteries manufactured by the appellants are first packed in Polythene boxes and then these Polythene boxes are placed in Cardboard Cartons. There are certain varieties of batteries which are packed directly in Cardboard Cartons. There is no doubt that packing in Polythene bags and Cardboard Cartons is includible in the determination of the value of batteries and torches for the purpose of levy of excise duty. The question arises only in regard to the wooden boxes in which the Cardboard Cartons are placed at the time of delivery at the factory gate. There is some dispute between the parties whether the Cardboard Cartons are packed in wooden boxes in all cases. It is stated that when they are delivered in the course of the wholesale trade at the factory gate, they are not packed in wooden boxes as a matter of course but they are packed in wooden boxes only in those cases where delivery is taken by wholesale dealers outside the city of Allahabad. It is not necessary for the purpose of these appeals to decide this disputed question of fact. Even if the Cardboard Cartons are packed in wooden boxes in all cases, it is clear that the cost of such secondary packing in wooden boxes is not includible in determination of the value of batteries and torches. This question is no longer res integra. It stands concluded by the majority decision of this court in Union of India v. Godfrey Philips India Limited 1985) 4 S. C. C. 369 = 1985 (22) E. L. T. 306 (S. C. ). The question which arose in that case was in regard to secondary packing of cigarettes in corrugated fibre board containers. The cigarettes were manufactured and packed in cardboard packets, each containing 10 to 20 cigarettes and those packets were packed in Cartons or Outers and finally, Cartons and Outers were themselves packed in corrugated fibre board containers. This court took the view by a majority of two against one that corrugated fibre board containers were used as secondary packing only in order to ensure cartons or outers against injury or damage during transport and that it was not necessary for putting the cigarettes in the corrugated fibre board containers for their sale in the wholesale market at the factory gate and the cost of such secondary packing was therefore not liable to be included in determination of the value of the cigarettes for the purpose of excise duty. The same reasoning must apply in the present case and we must hold that Cardboard Cartons were placed in wooden boxes for the purpose of protecting torches and cells against injury or damage during transport and that packing in wooden boxes was not necessary for putting the torches and batteries in the condition in which they are generally sold in the wholesale market at the factory gate.

(2.) We therefore reach the conclusion that the cost of wooden boxes is not liable to be included in the value for levy of excise duty. We accordingly allow the appeal, set aside the order made by the High court in the Writ Petition as also the order made by the Appellate Collector and direct the assessing authority to proceed to make assessment in accordance with the view taken in this Judgment and on such assessment being made, the assessing authority will refund to the appellants any excess amount which may be found to have been recovered by the Revenue. This direction will be carried out by the assessing authority within six months from today.