Customs, Excise and Gold Tribunal - Delhi
R.C.S. Vanaspati Industries Ltd. vs Cce on 1 October, 2004
Equivalent citations: 2004(117)ECR291(TRI.-DELHI)
ORDER
S.S. Kang, Vice President
1. The appellant filed this appeal against order-in-appeal passed by the Commissioner (Appeals)
2. The appellants are engaged in the manufacture of vegetable products. Several show-cause notices were issued to the appellant asking for differential duty on the ground that the cost of containers are to be included in the assessable value of the final product.
3. The contention of the appellant is that the Commissioner (Appeals) in the impugned order held that the containers are returnable and in terms of letter issued by Ministry of Food & Civil Supplies (Department of Civil Supplies), up to 31.7.1985, the value of returnable containers which are re-used in the packing of final product is not includible in the assessable value of the final product. However, the Commissioner (Appeals) held that after 31.7.1985 as the Ministry of Food & Civil Supplies had not allowed the use of second hand containers in the packing of the final product, therefore, after this date the value of the container is to be included in the assessable value of the final product.
4. The contention of the appellant is that the permission to use the re-cycled tins for packing of the final product was extended up to 30th April 1988 vide letter dated 30th March 1988 issued by the Ministry of Food & Civil Supplies. The contention is that, in view of this, the demand is not sustainable.
5. The Revenue reiterated the findings of the lower authorities.
6. We find that the Commissioner (Appeals) in the impugned order held as under:
From the aforesaid facts, the containers were returnable and in terms of Ministry of Food & Civil Supplies (Department of Civil Supplies) letter dated 6.5.1985 till 31.7.1985 were re-usable. Since the containers are returnable, the value thereof is not includible in the assessable value. The section 4 of the Central Excise Act, 1944 has provided that the 'value' in relation to any excisable goods includes the cost of packing except the cost of the packing, which is of a durable nature and is returnable by the buyer to the assessee. The facts and circumstances of the case indicate that the impugned containers were of durable nature and returnable. However, the said returnable (second hand) containers could be re-used till 31.7.1985 as evident from the letter dated 6.5.1985 of Ministry of Food & Civil Supplies (Department of Civil Supplies) supra. Thereafter, the appellants were not entitled to use returnable (second hand) containers for packing of their product i.e. Vegetable after 31.7.1985. Hence the appellants were required to include the value of containers amounting to Rs. 49,03,048.60 cleared during the period after 1.8.1985 to December 1985 involving Central Excise duty amounting to Rs. 4,90,304.86. According, I reduce the demand of duty from 12,55,699.99 to Rs. 4,90,304.86 in respect to demand on packing containers.
7. We find that the demand was confirmed by taking into consideration the letter of Ministry of Food & Civil Supplies whereby the manufacturer were allowed to re-use the second hand containers in the manufacture of final product. The permission was extended till 30th April 1988, therefore, the demand is not sustainable and set aside and the appeal is allowed.
(Operative part of the order pronounced in open Court.)