ALEMBIC GLASS INDUSTRIES LIMITED Vs. UNION OF INDIA

JUDGEMENT

(1.) Alembic Glass Industries Limited is the petitioner. The petitioner is manufacturing glass and glassware which fall under Tariff Item No. 23A in the First Schedule to the Central Excises and Salt Act 1944 The petitioner has got a factory at Baroda in the State of Gujarat. The glass and glassware produced by the petitioner-Company are purchased by wholesale buyers. Anyone can buy the petitionerCompanys products in wholesale. Amongst the buyers of the excisable goods produced by the petitioner-Company are manufacturers of medicines producers of oil manufacturers of chemicals and milk dairies. It is the case of the petitioner-Company that it is not necessary that glass and glassware manufactured by it should be sold in packed condition. According to them they can be sold in naked condition. The petitioners next contend that in some cases their buyers supply the packing material and sometimes they purchase the packing material from the market pack the goods in it and sell them to their wholesale buyers. The petitionerCompanys buyers sometimes require a particular kind of packing as for example in cartons or in corrugated sheets. Others are satisfied with ordinary packing consisting of hay or straw padding in gunny bags. The petitioner further contends that under Tariff Item 17 in First Schedule to the Central Excises and Salt Act 1944 excise duty is leviable on packing materials themselves. It is further alleged that the cost of packing material is borne by the buyer and that the petitioner shows the price of the excisable goods and the price of packing material separately in its pricelist. It is next alleged that price of packing material is not identifiable with the value of the excisable goods and that therefore excise duty cannot be levied on the composite price of the excisable goods as well as the packing material. Next the petitioner allege that packing material is not a part of the manufacturing process. In other words according to them it is not incidental to manufacture. The petitioner further avers that packing is done for the safety of the goods during transportation and that no further manufacturing process is applied to packing material. After amended sec. 4 of the Central Excises and Salt Act 1944 came into force on October 1 1975 the Central Excise authorities started assessing the excise duty on the composite price of excisable goods as well as packing material and did not approve the pricelist submitted by the petitioner showing the prices of excisable goods alone.

(2.) The petitioner therefore filed this petition in which two reliefs are claimed :-

(3.) In order to examine the first contention which has been raised on behalf of the petitioner it is necessary to reproduce the definition of value given in sec. 4(4)(d) of the Central Excises and Salt Act. It is in the following terms :-