Customs, Excise and Gold Tribunal - Delhi
Associated Cement Companies Ltd. And ... vs Collector Of Central Excise And Ors. on 4 December, 1986
Equivalent citations: 1987(11)ECC112, 1987(13)ECR336(TRI.-DELHI), 1987(27)ELT746(TRI-DEL)
ORDER K.L. Rekhi, Member (T)
1. A common issue is involved in these 8 appeals and they were heard by us together. This common order will dispose of all of them.
2. The short point in dispute is whether the cost of gunny bags should be included while determining the value of cement packed therein for the purpose of assessment of Central Excise Duty.
3, Before we start the discussion, it would be helpful to state the background of the problem. In regard to determination of value for purposes of assessment of Central Excise Duty, Section 4(4)(d)(1) of the Central Excises and Salt Act, 1944 lays down as under :
"(d) "value", in relation to any excisable goods - (i) where the goods are delivered at the time of removal in a packed condition, includes the cost of such packing except the cost of the packing which is of a durable nature and is returnable by the buyer to the assessee"
There is no dispute between the appellants and the department that gunny bag was a durable packing since it was capable of being re-used. The dispute is on the point whether it was returnable by the buyer to the appellants.
4. The period to which the controversy before us relates is from 1-10-1975 to 8-1-1976. During this period, cement was a controlled commodity by virtue of the Cement Control Order, 1967 promulgated by the Central Government under Section 18G and Section 25 of the Industries (Development and Regulation) Act, 1951 for the declared "purpose of securing the equitable distribution and availability at fair prices of cement, the supply and distribution of, and trade and commerce in, cement." Clauses (4) and (8) of the Cement Control Order are relevant for our purpose. We reproduce them below :-
"4. Power to direct sale or transport :
The Central Government may, by order, require any producer to sell cement to such person or class of persons or to transport cement to such destinations by such modes of transport, and on such terms and conditions, as may be specified in the order."
"8. Price at which producer may sell :
No producer shall, himself or by any person on his behalf, sell :-
(a) water-proof (hydrophobic) cement at a price exceeding Rs. 246.65 per metric tonne;
(b) rapid hardening cement, low heat cement, and grey cement of specific surface not less than 3500 cm /g at a price exceeding Rs, 237.65 per metric tonne; and
(c) any other variety of cement at a price exceeding Rs. 214.65 per metric tonne, free on rail destination railway station plus the excise duty paid thereon :
Provided that in case of packed cement, there shall be added to the price referred to in this clause such charges as may be fixed by the Central Government in respect of packing in jute bags or in any other containers, and different charges may be fixed for the use of new and serviceable second-hand jute bags and for the use of different containers in such packing :
Provided further that in the case of packing of cement in jute bags the producer shall not use serviceable second-hand jute bags in excess of the limit specified by the Central Government from time to time."
On 1-10-1975, the Cement Controller in the Ministry of Industries and Civil Supplies, Government of India, issued a circular as under :-
"No. CC/CO/8(1)/75/18126 Dated : Ist October, 1975.
ALL PRODUCERS/SELLING AGENTS
Sub : F.O.R. destination price of cement and packing charges applicable
during the period 1-10-1975 to 31-12-1975.
Dear Sirs,
The Ministry of Industry & Civil Supplies (Department of Industrial Development) have intimated that the charges for packing one metric tonnes of cement in 20 new as well as old bags in the ratio of 50 and 50 per cent respectively for the period 1-10-1975 to 31-12-1975 will be Rs. 40.98 (Rupees forty and paise ninety eight) only. Accordingly, the price of cement packed F.O.R. destination railway station per metric tonne during the aforementioned period will be as under :
XXX XXX XXX XXX
XXX XXX XXX XXX
The serviceable second hand jute bags may be collected by the Bag Collecting Agents of the respective cement factories (to be collected by them at the consumers' work site on 'Cash and Carry' basis) and the resale price for the period 9-11-1975 to 31-12-1975 is Rs. 92.54 (Rupees ninety two and paise fifty four) only per 100 bags. Sales Tax where leviable, extra.
Yours faithfully, Sd/-
(S.S. MIGLANI) Deputy Chief Cement Officer."
5. In terms of the Cement Control Order, Release Orders were issued by Regional Cement Officer to various cement factories for supply of the stated quantity of cement to bulk consumers. The specimen copies of the Release Orders produced before us (which we admitted as additional evidence) show that they were all in a uniform format. On the reverse of the Release Orders, 9 serially numbered conditions were printed. Below condition No. 9, there was a boxed instruction in the following terms :-
Please preserve empty cement bags in serviceable condition and return them to the factory of origin or its Collecting Agent on payment.
Dealers, stockists and certain private consumers were issued permits by the respective District Collector or Deputy Commissioner for supply of cement from the specified factory,
6. Our attention was drawn to the following three judgments of High Courts which were specific and directly on the issue and which decided the matter in favour of the assessee :
(1) 1980 E.L.T, 593 (M.P.) - Birla Jute Manufacturing Company Limited v. Union of India and Ors.
(2) 1982 E.L.T. 214 (A.P.) - Keso Ram Cements v. Union of India and Ors.
(3) Karnataka High Court judgment dated 29-6-1984 in Writ Petition Nos. 13625/77, 16563 and 16564/79 - Bagalkot Udyog Limited v. Union of India and Ors.
In paragraph 9 of Birla Jute Manufacturing Company judgment, the Madhya Pradesh High Court held as under regarding the second condition of returnability in Section 4(4)(d)(1) :-
(1) "It is not necessary for getting the benefit of exception that the packing must actually be returned. What is necessary is only that packing should be returnable by the buyer which only means that the buyer if he so likes can return the packing under the terms of sale obliging the seller to give refund or adjustment of the packing charges or to pay re-sale value of the packing returned."
(2) "The directions contained in the price fixation order and the authorisation are binding on the factories and the purchasers and they have statutory sanction of the Cement Control Order and the parties are bound by them in the same manner as by terms mutually agreed. Under these directions the purchasers have the right to return' the bags in serviceable condition to the factories directly or through their collecting agents and to get refund or adjustment of the packing charges or 'payment of the value of the packing returned. Thus these directions make the packing returnable by the buyer to the assessee within the meaning of Section 4(4)(d)(1)."
(3) "It, is not necessary to get the benefit of the exception for the assessee to show that the packing material has been returned or the cost of packing has been refunded. Indeed, this is impossible to show at the stage of removal. All that is necessary is to show that the packing is returnable by the buyer to the assessee under the terms of sale. The question of actual return is entirely irrelevant."
(4) "The practice of the factories to appoint collection agents for collection of bags is only a convenient mode of giving effect to the term that packing is returnable. It does not mean that the purchaser cannot otherwise return the packing if he so likes."
Against the aforesaid judgment of the Madhya Pradesh High Court, the Union of India filed special Leave Petition before the Supreme Court (S.L.P. Civil No. 11044-45/80). The Special Leave Petition was dismissed by the Supreme Court on 30-7-1982.
The Andhra Pradesh High Court and the Karnataka High Court noticed the aforesaid Madhya Pradesh High Court judgment and expressed their full agreement with it.
7. Both sides stated before us that they were not aware of any appeal having been filed against the Andhra Pradesh and Karnataka High Court judgments. They also stated that on the specific issue of exclusion of cost of cement gunny bags from the assessable value there was no contrary High Court judgment In the circumstances, we put it to the learned representative of the department as to why, in keeping with the practice of this Tribunal, the unanimous verdict of Madhya Pradesh, Andhra Pradesh and Karnataka High Courts should not be followed by this Tribunal. Our attention was drawn to two earlier orders of this Tribunal relating to Panyam Cements and Mineral Industries Limited v. Collector of Central Excise, Hyderabad 1984 (18) E.L.T. 31 and Udaipur Cement Works, Udaipur v. Collector of Central Excise, Jaipur [Order No. 732/1984-A passed in appeal No. E-130/77-A]. We notice, however, that the aforesaid three High Court judgments were not brought to the notice of the earlier Benches of this Tribunal when they heard the appeals of Ranyam Cement and Udaipur Cement Works. Therefore, any conclusion reached in the earlier Tribunal Orders contrary to the aforesaid judgments of the three High Courts, for whatever reason, cannot come in the way of our respectfully following the ratio of the High Courts judgments.
8. The learned representative of the department then stated that the High Court judgments need not be considered as binding on the Tribunal because of the following grounds which he said had not been considered by those High Courts :-
(1) There was no direction in the Cement Control Order that old serviceable bags must be used for packing cement. On the contrary, the direction in the second proviso to clause (8) of the said Order was that serviceable second-hand jute bags shall not be used in excess of the limit specified by the Central Government from time to time.
(2) The Cement Controller of India had no authority under Clause 4 of the Cement Control Order to include the boxed instruction, referred to in paragraph 5 above, on the reverse of the Release Orders issued for supply of cement.
(3) The boxed instruction was only an advice or request; it could not be considered a condition or direction having a binding effect on the buyer and the seller. This is also clear from the fact that the boxed instruction did not carry a serial number in the manner the other conditions and instructions preceding it did.
(4) The case of Birla Jute Manufacturing Company decided by the Madhya 'Pradesh High Court was distinguishable from the present set of appeals before us inasmuch as, in addition to specimen copies of Release Orders, copies of invoices, challans and Cement Factory's Circular to stockists etc. were available in the High Court case while such evidence was lacking in the present appeals and only Release Orders were on record before us. The additional evidence available in the High Court case contained a note to the buyers to return the serviceable second hand gunny bags. It could thus be said in that case that returnability of the bags was a term of sale. No such inference could be drawn in the present appeals. Further, the Release Orders on record before us did not cover the entire quantity of cement cleared from the appellants' factory during the material period.
(5) The statutory scheme of the Cement Control Order left no area for bargaining on returnability of the bags and hence the returnability could not be considered a term of contract of sale, [Reliance on AIR 1978 S.C. 449 - M/s. Vishnu Agencies (Pvt) Ltd. v. Commercial Tax Officer].
(6) The conventional practice followed in the trade regarding returnable containers was that the seller took a security deposit from the buyer and paid it back to him on the buyer returning the container to the seller. The practice followed by the appellant cement factories was different. Theirs was an outright sale of the gunny bags along with the cement packed therein, followed by re-purchase of the cement serviceable bags on their return.
(7) While the pricing circular dated 1-10-1975 of the Ministry of Industry and Civil Supplies fixed the charges for packing one metric tonne of cement in 20 new as well as old bags in the ratio of 50 and 50 per cent respectively at Rs. 40.98, the re-sale price for the second hand serviceable bags was fixed at Rs. 92.54 only per 100 bags, exclusive of sales tax. Thus the re-sale price for 20 returned bags came to about Rs. 18.40 as against the original sale price for 10 new and 10 second hand bags charged from the customer at Rs. 40.98. This left out about Rs, 22.58 as the net packing cost which was not refunded to the customer. At least this unrefunded cost ought to be included in the assessable value.
(8) There was no evidence to show as to what extent the second hand unserviceable bags were returned to the appellants. In the absence of such evidence/ it could not be said that the bags were ordinarily returnable.
9 We wonder why, if the above points raised by the learned representative of the department were really substantial ones, they were not raised before any of the High Courts or before the Supreme Court or why appeals based thereon were not filed against the judgments of the Andhra Pradesh and Karnataka High Courts, It has been the practice of this Tribunal to respectfully follow the judgment of a High Court unless a contrary judgment by some other High Court is brought to our notice. In the present case, there are unanimous judgments by three High Courts and there is no contrary judgment by any other High Court. Further, the judgment delivered by the Madhya Pradesh High Court stands confirmed by the Supreme Court through the dismissal of the Special Leave Petition filed by the Union Of India. Strictly speaking, therefore, it is unnecessary for us to launch an independent examination of the issue. Even so, we have given our earnest consideration to the points made by the learned representative of the department but we do not find ourselves persuaded to take a view contrary to the one reached by the Madhya Pradesh, Andhra Pradesh and Karnataka High Courts. In the succeeding paragraphs, we shall deal with each of the eight points put-forth by the learned representative of the department.
10. It is, no doubt, true that the Cement (Control) Order does not contain an express direction to the effect that the cement factories must use serviceable second hand gunny bags to a specified extent. But no such direction appears to us to be necessary. Since serviceable second hand gunny bags are bound to be cheaper in price as compared to new bags, it is a matter of simple business commonsense that left to themselves the cement factories would like to use the maximum number of second hand serviceable bags which they could manage to collect. But since the controlled price of cement fixed the packing charges on the basis of 50% new and 50% old bags, the Cement Control Order deemed it necessary to put a ceiling on the use of old bags lest cement factories profiteer at the cost of the consumer. Lack of an express provision to use old bags in the Cement Control Order did not mean that Cement factories would not use old bags or would use them to an extent which is less than 50%. Nor did it mean that serviceable second hand bags became non-returnable thereby. No cement factory would think of using new bags wholly or in pre-dominant quantity and thereby lose money. This is so because the controlled price of cement did not Compensate the factory for cost of new bags beyond 50%.
11. We are not the right forum before which the department should choose to challenge the vires of the boxed instruction on the reverse of Release Orders. Even otherwise, we find no substance in point No. (2) of the department. One of the declared objects of the Cement Control Order was to make cement available to consumers at fair prices. One method of keeping the cement price at a lower level was to have a suitable mix of old and new bags for packing the cement The Release Order, by incorporating the boxed instruction, served as a mechanism to get at that mix in actual practice. We do not see how the Central Government or the Cement Controller of India (to whom the power of the Central Government had been delegated in terms of the statute) exceeded their authority by incorporating the boxed instruction in the Release Order.
12. The third point of the department is not really a new one. The Madhya Pradesh High Court has already recorded a specific finding that the boxed instruction was a direction and that it was binding both on the sellers and the buyers of cement. As already stated, the judgment of the Madhya Pradesh High Court stands confirmed by the Supreme Court and two other High Courts (Andhra Pradesh and Karnataka) have also fully agreed with it. There is no contrary judgment brought to our notice.
13. The 4th point made by the department is also not new. The Gujarat High Court (Full Bench) held in paragraph 18 of their judgment in Ahmedabad Manufacturing and Calico Printing Ltd. and Ors. v. Union of India (1982 E.L.T. 821) that "returnable' means returnable as per agreement between the buyer and the seller. The Bombay High Court in Sathe Biscuits and Chocolate Company Ltd. and Anr. v. Union of India and Ors., 1984 (17) E.L.T. 39 (Bom.) agreed with the Gujarat High Court and held: the use of the words is relevant and is clearly an indication of a returnability, being a term of the contract between the manufacturer and the wholesaler". Both these High Courts were dealing with cases of commodities which were not subject to statutory price control. When the case of cement, a price controlled commodity, came up before the Madhya Pradesh High Court, that High Court amplified the formulation arrived at by the Gujarat and Bombay High Courts to say that returnability as a term of sale could be fixed either by mutually agreed contract between the seller and the buyer or by statute. In both cases, the term was equally binding. Obviously, there could not be any contract which was contrary to the statute. There is nothing in the judgment of the Gujarat and Bombay High Court which is contrary to the judgment of the Madhya Pradesh High Court. It is true, no doubt, that the ' Madhya Pradesh High Court had before it, in addition to Release Orders, certain invoices/challans and a circular letter to stockists issued by the cement factory of M/s. Birla Jute Manufacturing Company Limited. But we fail to see how we could come to a different conclusion on return-ability 'of cement bags just because the additional evidence of invoices etc. is not available to us. The Release Orders shown to us in themselves covered a substantial quantity of cement. All the Release Orders were in the same format and used the same language. There is no reason to think that the remaining Release Orders would not be in the same format 'and language. Further, for the sheer economics of working, which we have discussed in paragraph 10 above, it is inconceivable that there would be any cement factory which would not have made arrangements to collect and use at least 50% serviceable cement second hand gunny bags.
14. It is not correct to say that the statutory scheme of the Cement Control Order left no area for bargaining on returnability of used bags. The buyer had the choice of time and place for return. He could either return the used bags direct to the cement factory or through a collection agent of the factory. The cement factory had the choice of not accepting such of the bags as were not in a serviceable condition.
15. The mode of refunding the cost' of used cement bags was, because of the statutory arrangement, a matter of mutual convenience between the buyer and the seller. The Madhya Pradesh High Court in their judgment in Birla Jute case and later the Bombay High Court in their judgment in Corn Products Company case 1984 (16) ELT 177 (Bom.) found nothing wrong with the practice of the seller first recovering the cost of the container (along with price of the goods) and then refunding it on its return.
16. In so far as difference between cost of packing recovered from the customer and that refunded to the customer on return of packing is concerned, we do not express our views except saying that both costs were statutorily fixed under the Cement Control Order and that the material regarding the difference between,, the two was before the High Court of Madhya Pradesh in the case of Birla Jute. That High Court has, though not considered the issue in the light now put forward by the learned representative of \ the department, allowed the benefit to the petitioner-assessee despite the requisite material before it. We see rio reason in not allowing a similar benefit to the appellants herein in the absence of any judgment of a High Court (in the case of cement bags) favouring the Revenue.
17. Point No. 8 of the department has already been taken care of by the various High Court judgments. There is no stipulation in Section 4(4)(d)(i) that to be considered returnable, the containers should ordinarily be returned; nor does the section lay down any particular extent of return. Both the Madhya Pradesh High Court and the Bombay High Court (in Sathe Biscuits case) have held that actual return of the containers is irrelevant. In their subsequent judgment in Corn Products Company case (supra), the Bombay High Court went further and held that extent of return was also irrelevant.
18. After the arguments before us' were concluded, a Supreme Court judgment on the meaning of 'returnable in Section 4(4)(d)(i) has come to our notice 1986 (2) SCALE 880 (Nov. 24-30) - K. Radha Krishrtaiah v. Inspector of Central Excise Gooty and Ors.]. The Supreme Court has held that "it cannot be said that the packing is returnable by the buyer to the assessee unless there 'is an arrangement between them that it shall be returned." As we see it, it confirms the judgment of Madhya Pradesh, Andhra Pradesh and Karnataka High Courts in regard to cement. In the light of this judgment and the judgments of the Madhya Pradesh, Andhra Pradesh, Gujarat and Bombay High Courts, it would be worthwhile summarising the norms relevant to returnability of durable containers. We list the norms as under :-
(1) Though the word 'returnable' used in Section 4(4)(d)(i) is distinguishable from 'returned', mere capability of being returned is not enough. Returnability should be a term of sale either by contract between the buyer and the seller or by statute. It cannot be said that the packing is returnable by the buyer to the assessee unless there is an arrangement between them that it shall be returned.
(2) Actual return is not relevant. What is necessary is that if the buyer choses to return the packing, the seller should be obliged to accept it and refund the stipulated amount.
(3) Extent of return is also not relevant.
(4) The mode of return is a matter of mutual convenience. Whether the packing is returned direct to the seller or through his collection agent makes no difference.
The cases of cement gunny bags during the material period before us satisfy the above norms of returnability. We, therefore, hold that their cost was not includible in the assessable value of cement,
19. In the appeals at 2-4 of M/s. Shree Digvijay Cement Co. Ltd. an additional point is involved in that a part of the duty demand served on them relates to a certain quantity of cement which was cleared in bags supplied by the customer. The following two High Court judgments have settled this issue :-
(1) 1986 (23) E.L.T. 394 (Bombay) - Govind Pay Oxygen Ltd. v. Assistant Collector of Central Excise.
(2) 1986 (10) Part 4 E.C.C. 281 (Kart.) -.Alembic Glass Industries Ltd. v. Union of India and others.
No contrary judgment of any other High Court has been brought to our notice. The aforesaid two judgments have already been accepted by this Tribunal in quite a few cases. Respectfully following the ratio of these High Court judgments, we hold that cost of packing supplied by the customer cannot be included in the assessable value of the goods packed therein.
20. In the result, we allow all the 8 appeals with consequential relief to the appellants.
ORDER M. Gouri Shankar Murthy, Member (J)
21. While agreeing substantially with the order proposed by our Learned Brother Rekhi and concurred in by all the ; other Brothers, I would like to touch upon some aspects of the case, which do not appear to have been, if I may say so with respect, taken into consideration earlier.
22. (a) For a levy on manufacture, the price at which the goods may eventually be sold after manufacture is irrelevant except it be to evaluate the goods where the levy is ad valorem. The amended Section 4 of the Act lays it down, inter alia, that the assessable value, where the levy upon manufactured goods is ad valorem, shall be, subject to the other provisions of that Section, "deemed to be the normal price thereof", meaning thereby, "the price at which such goods are ordinarily sold" or in the alternative, "the price or the maximum price" fixed under any law for the time being in force.
(b) The "normal price" or "the price or the maximum price" fixed under a statute are not defined but in terms of S.2(10) of the Sale of Goods Act, 1930, it is the money consideration for a sale of goods. The "price" payable is, therefore, either in terms of the agreement to sell, express or implied, between the buyer and the seller (the assessee) or may be one that is ordained by statute.
In the latter case, the agreement between the buyer and seller and the resultant sale are implied rather than express in terms of the compulsive sanction of the statute. [Please see the minority judgment of Hidayatullah J. in AIR 1963 S.C. 1207 - (M/s. New India Sugar Mills v. Commissioner of S.T.) - approved by a majority of six to one in 1978 (2) S.C.R. 433 - (Vishnu Agencies v, C.T.O.)]. Therefore, a transfer of property in goods ordained by statute at a specified price is no less a contract of sale and in terms of the second proviso to SA, such price also is deemed to be the "normal price" which in turn is the assessable value.
(c) But then, in terms of an agreement to sell between the parties, the agreed price may include the price of packing or it may be charged extra. Likewise, a statute may fix the price for the goods as well as an additional price for the packing. Thus, the legislative scheme in the relevant Cement Control Order envisages an addition to the controlled price of cement of "such charges as may be fixed by the Central Government in respect of packing and different charges may be fixed for the use of new and serviceable second hand jute bags."
(d) In either case, therefore, should the value of assessable goods be exclusive of the cost of packing regardless of whether that cost is included in the price, itself or charged separately either in terms of the agreement to sell between the parties or the statutory sale? It is a deemed value that is adopted for assessment. It is the normal price of the goods that is deemed to be that value. That normal price may be a price agreed to between the parties or a controlled price. Nevertheless,/the intrinsic value of the goods when duly packed is obviously L enhanced by the cost of packing. The value, even though deemed, cannot, in the circumstances, be the price of the goods bereft of the cost of packing. It can only be the value of the goods in the unpacked condition plus the cost of packing. Therefore, it is, that in terms S.4(4)(d), it was provided that the value should include the cost of packing. '
(e) Once it is so provided and it is ultimately the assessable value that has to be determined in respect of the goods in a packed condition at the time of removal, and not merely the normal price at which the goods without packing may be sold, one would hardly expect an exception to the aforesaid rule of evaluation, like for example, where the packing is durable and returnable. The intrinsic value of goods delivered in a packed condition, for purposes of assessment, at the time of removal, cannot be any the less just because some time in future the durable packing may be returnable or even returned. It may be that when the assessee gets back the durable packing, which he may re-use, his initial investment in such packing is not irretrievably lost. But that is really of no relevance in computing the intrinsic value of goods in a packed condition at the time of removal. The principle of evaluation of the excisable goods at the time and place of removal enunciated earlier would appeal to have been ignored in providing the exception, just because the returnable packing, if and when returned, is capable of being used repeatedly at no extra cost every time there is a removal. Although an amendment was advised at the earliest |o resolve the conflict in basic concepts, no appropriate amendment that could have pre-empted the deluge of litigation would appear to have been carried out.
(f) Be that as it may, in terms of the provision, unless the two aforesaid conditions are satisfied, the cost of packing is not to be excluded in the computation of the value of assessable goods.
(g) The delivery envisaged in the provision [S4(4)(d)], as already stated, may be pursuant to an agreement to sell between the parties or a statutory sale., Whichever it is, the provision can be understood to mean that, since there is an implied sale of and consequent change in title to and ownership in the packing material as well, the assessable value of the goods includes the cost of such packing material. Looked at in this light, where the packing is not charged extra and is durable and returnable (gas cylinders) or where the packing is provided by the buyer, there may be, in fact, no sale of and no consequent change in ownership of the packing material. If, therefore, it is only the normal price of the goods in a sale that is to furnish their assessable value, the value of unsold packing cannot form a part thereof. So also, where there has been a sale of packed material and a separate price charged for a durable packing and contemporaneously, an agreement, express or implied, for return and resale at a price agreed to between the parties or imposed by statute.
(h) The transactions in these appeals are but statutory sales of goods in a packed condition with a contemporaneous convenant for a return and resale of the packing at a price specified. For the exclusion of the cost of the durable packing in the computation of the assessable value, it is sufficient if the packing is durable and "returnable". "Returnable" is What is agreed to be returned and accepted on such return. If an obligation to return and a reciprocal obligation to accept such return, may be by agreement between the parties, or may be imposed by statute, is all that is meant by "returnable", the actual return is immaterial.
i) Again, if "returnable" is not "returned", the depreciated cost of the durable packing as and when returned sometime in future, has no impact on the assessable value at the time of removal. Just because it is not in fact returned, lit does not cease to be "returnable". The entire cost of such durable and returnable packing is to be excluded from the assessable value, regardless of whether it is returned or not. It is no less returnable because of the depreciated price that may be required to be paid if and when returned. When the entire cost of the durable and returnable packing is to be excluded from the computation of the assessable value, even where it is not returned at all, it is unwarranted to embark upon a speculation of the probable increase in the assessable value at the time of removal as a consequence of the payment in future of a depreciated price rather than the full price for that packing on its hypothetical return. Since this was also an issue agrued, we have necessarily to hold that a reduced price statutorily required to be paid on the return of the durable and returnable packing has no relevance to its return-ability or the determination of the assessable value excluding the original value of such packing.
(j) Our orders in 1984 (18) ELT 31 (Panyam Cements and Mineral Industries Ltd. v. Collector of Central Excise, Hyderabad) and Order No. 732/1984-A in Appeal No. E/130/77-A (M/s. Udaipur Cement Works, Udaipur v. Collector of Central Excise, Jaipur) are easily distinguishable and hence inapplicable. In the facts of the first of these two, a plea for exclusion of the value of packing on the ground that it is durable and returnable was raised before us for the first time. There was neither a plea to that effect nor evidence on record in support of such a plea earlier. On the facts of that case and in the light off the correspondence between the parties, the case was decided. In the latter, no proper submissions were made about the statutory force of the Cement Control Order. The relevant order was not even placed on record. In fact, the employee of the assessee was unable to state why, at all, the cost of the packing was not to be taken into account for the determination of the assessable value.