CCE, CHANDIGARH Vs. RASAN DETERGENTS

JUDGEMENT

(1.) COLLECTOR of Central Excise, Chandigarh has filed this appeal against the order in appeal dated 15.3.1991 passed by the Collector of Central Excise, Chandigarh, whereby she had partially accepted the appeal filed before her by the present respondent in regard to the claim made by them for exclusion of the cost of what had been claimed as secondary packing used for packing their excisable products, soap and detergent cakes. It was held by the Collector (Appeals) following the judgment of the High Court of Bombay in Godrej Soaps Ltd. v. UOI reported in : 1985 (25) ELT 482 : 1992 (41) ECR 149 (Bom) that the cost of outer secondary packing in this case was not includible in the assessable value of the goods under Section 4 of the Central Excise Act, 1944. This finding is challenged in the present appeal on the ground that what has been claimed to be special secondary packing is the type of packing which is generally used for marketing the same and that such packing is essential for its marketability. In support of the appeal, Shri M. Ali, JDR stated that the excisable product in question, namely, soaps and detergent cakes are initially packed in wrapping paper and a number of such packed soap cakes are then placed in a cardboard box or CFC carton. The goods are sold at the factory gate in that packed form. The correct position in law in regard to the includibility of the cost of such packing in the assessable value of the product packed has been set at rest by the judgment of the Supreme Court in MRF Ltd. case : 1995 (77) ELT 433 : 1995 (58) ECR 385 (SC). He invited our specific attention to para 44 therein which was with reference to the outer packing for the very same product, namely, detergent cakes/soaps. He, accordingly, pleaded that the department's appeal be allowed.

(2.) IN reply Shri M.P. Devnath, learned counsel for the respondent invited our attention to the contention raised in the show cause notice wherein it has been stated that soaps or detergent cakes are marketed at the factory without packing in CFC. We find it difficult to accept this position as contained in the reply to the show cause notice. This plea stands rejected by the authorities below and rightly so, according to us. Since the primary packing of the individual soap cake is only in paper wrapper, some additional packing is required to effect delivery of wholesale quantity at the factory gate. It cannot be the case of the respondent that the individual soap cakes packed only in paper wrapper are delivered at the factory gate. The appeal succeeds. The impugned order in appeal is set aside in so far as the challenge to the aspect of secondary packing by way of CFC and boxes is concerned.