TRIVENI GLASS LIMITED Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) THE issue involved in these two appeals, filed by M/s. Triveni Glass Ltd., is whether the cost of secondary packing is to be included in the assessable value of the goods manufactured by them.

(2.) SHRI V.N. Shukla, learned Advocate, fairly mentioned that the issue regarding inclusion of cost of secondary packing in the assessable value of sheet glass manufactured by them has been decided by the Allahabad High Court against the appellants as reported in 2000 (120) E.L.T. 313 (All). He submitted that as per the Board's Circular F. No. 6/24/74 -CX -1., dated 18 -8 -1975, glass and glassware are capable of being sold without packing and packing in such a case need not be held as a process incidental or ancillary to the manufacture of the final product; that the Board, therefore, decided that in the case of glass and glassware, inclusion of packing charges may not be insisted upon in determining the assessable value. He, therefore, contended that in view of this Circular, which has since not been withdrawn, the Department cannot include the cost of secondary packing in the assessable value of their final product.

(3.) WE have considered the submissions of both the sides. The test laid down by the Supreme Court in the case of M.R.F. Ltd. for inclusion of packing charges, is "whether packing, the cost whereof is sought to be included is the packing in which it is ordinarily sold in the course of 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 market at the factory gate. If it is, then its cost is liable to be included in the value of the goods; and if it is not, the cost of such packing has to be excluded." The Hon'ble High Court of Allahabad in appellants' own case, i.e. Triveni Sheet Glass Works Ltd. v. Union of India, 2000 (120) E.L.T. 313 (All.), has held that "the averments in paragraphs 11 and 12 of the Writ Petition .... show that secondary packing is necessary to put the goods in a condition in which they are sold in the wholesale market. So much so that in para 12 the Petitioner says that such packing is generally required by the buyers and is even done in advance to avoid delay in delivery and to bring efficiency in the sales of glass sheets, being fragile in nature. We are unable to accept the dealer's contention that the secondary packing was not necessary for selling the goods in wholesale at the factory gate." Thus, in view of the judgment of the Allahabad High Court in their own case, the cost of secondary packing is includible in the assessable value of the sheet glass. The Board's Circular, relied upon by the learned Advocate, has no force as the provisions of Section 4 have been changed w.e.f. 1 -10 -1975 and in view of the decisions of the Hon'ble Supreme Court and the High Court in their own case. Both the appeals are, thus, rejected.