TATA CHEMICALS LTD Vs. COLLECTOR OF CENTRAL EXCISE

JUDGEMENT

(1.) ISSUES raised in these appeals are virtually same. They relate to the deductions that can be claimed by the manufacturer from the sale price in arriving at the assessable value. Heads under which deductions were claimed by the manufacturer, namely, appellants were -

(2.) TRANSACTIONS which have given rise to these appeals are of the period from 1981 to 1985. Appeal E/1088/90 -A covers discount on all the abovementioned counts. Therefore, that appeal is taken as the main appeal and is dealt with hereunder.

(3.) LEARNED Counsel representing the appellants advanced an argument that gunny bags in which soda ash was sent to dealers were durable and returnable containers. Manufacturer, appellants herein, had issued circulars requiring the dealers to return the gunny bags for re -use. Pursuant to those circulars dealers were returning the gunny bags which could be used in despatching subsequent consignments. Since there was such an arrangement between the manufacturer and the dealers, the cost of gunny bags utilised should not have been included in the assessable value. Letters issued by the manufacturer on 15 -12 -1970, 1 -2 -1971 and 2 -4 -1971 along with credit notes dated 12 -3 -1988 and 31 -3 -1988.issued by the Company to the customers who returned the gunny bags, according to the Learned Counsel, bring out the arrangements between the manufacturer and the dealers regarding return of the durable packings. In support of this contention reliance was also placed on the decision of the Supreme Court in the case of Mahalakshmi Glass Works (P) Ltd. v. CCE reported in 1988 (36) E.L.T. 727. In that decision Their Lordships stated that the actual return or extent of return is not relevant. Therefore, it was argued before us that if there was an arrangement for return of the packing, the cost of that packing should be deducted for finding out the assessable value.