DUPHAR INTERFRAN LIMITED Vs. UNION OF INDIA

JUDGEMENT

(1.) The main question which arises in this petition is, as to whether packing distribution and forwarding costs can be taken into account for the purpose of determining the value under Sec. 4 of the Excises and Salt Act, 1944 (hereinafter referred to as "the Act") for levying excise duty, really now stands concluded by at least three decisions of this Court, in which it has been held that costs of packing and packing 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 to the wholesale dealers, the Petitioners have specified the basic trade price exclusive of excise duty per unit. For example, in the case of Lacto Calamine lotion 110 ml. the price is basic trade price exclusive of excise duty shown as Rs.4.22, the excise duty per unit is shown as Rs. 2.31 and packing and distribution cost per unit is shown as Re. 0.31 The price list contains terms and conditions of sale. Item No. 4 in these terms and conditions reads as follows :-

(3.) With reference to the price list the Assistant Collector informed the Petitioner-company that the company had excluded post- manufacturing charges from the list price shown in column 3 Column 3 referred to the basic trade price referred to above. The Assistant Collector held that since there was no provision for abatement of the same in the amended sec. 4 of the Act, the prices claimed by the company were not accepted. He positively made an order that after taking into account the post manufacturing expenses, the assessable values have been worked out and accordingly approved.