Customs, Excise and Gold Tribunal - Delhi
Geep Industrial Syndicate Ltd. vs Collector Of C. Ex. on 1 April, 1994
Equivalent citations: 1996(85)ELT290(TRI-DEL)
ORDER Lajja Ram, Member (T)
1. M/s. Geep Industrial Syndicate Ltd., Allahabad, had filed an appeal (listed as Appeal No. E/409/94-A), being aggrieved with the Order-in-Appeal No. 1-C.E.-ALLD/94, dated 7-1-1994, passed by the Collector of Central Excise (Appeals), Allahabad. Along with the appeal they also filed stay application under Section 35F of the Central Excises and Salt Act, 1944 (hereinafter referred to as the 'Act'), praying for dispensing with the pre-deposit of Rs. 8,91,022.93, demanded under the above mentioned order-in-appeal. The goods involved in the case are the torches and the dry cell batteries. The ground on which the dispensation of pre-deposit has been pleaded is that "the applicants have a prima facie strong case on merits".
2. The stay application was heard on 24-3-1994, when Shri V. Lakshmikumaran, Advocate appeared for the applicants. The respondents were represented by Smt. C.G. Lal, S.D.R.
3. Shri V. Lakshmikumaran, the learned Advocate stated that the assessee's earlier stay application on identical facts had been allowed by the Tribunal. The matter related to the packing of torches and dry cells batteries, in corrugated boxes, before their despatch from the factory. He submitted that for the purposes of the present stay application, he adopted the same arguments as were advanced by him in the earlier stay application disposed of by the Tribunal under their Stay Order Nos. 03 to 05/94-A, dated 4-1-1994.
4. Smt. C.G. Lal, the learned SDR submitted that the matter was entirely covered in favour of the Revenue by the Hon'ble Supreme Court's decision in the case of Collector of Central Excise v. Ponds India Ltd. reported in 1989 (44) E.L.T. 185 (SC). She stated that there was no doubt that the corrugated box packing was their secondary packing, and its cost was includible in the value of the goods in question. Even when their stocks were stored within the factory premises, they were stored duly packed in corrugated board cartons. As regards the applicants reliance on the Tribunal's earlier interlocutory order, the learned SDR submitted that the interim interlocutory order had no precedent value. It had no binding effect. In support of her contention in this regard she relied upon the Supreme Court decision in the case of Empire Industries Ltd. v. UOI - 1985 (20) E.L.T. 179 (SC), (para 53). She also referred to the Tribunal 's decision in the case of Nissan Rubber v. CCE - 1993 (63) E.L.T. 257 (Trib.). In that case it had been held that the Tribunal was competent to hear an application to vary or alter the stay order passed earlier. In this case it is an independent stay application, and the earlier stay order had no binding effect on the Tribunal . With reference to the judgment of the Hon'ble Supreme Court in the assessee's own case reported in 1992 (61) E.L.T. 328 (SC), the learned SDR stated that the matter therein related to the packing in wooden boxes, and not in corrugated cartons with which the Tribunal in the present matter is concerned.
5. In rejoinder the learned Advocate pleaded acceptance of their stay application on the basis of the Tribunal's earlier stay order Nos. 03 to 05/94-A, dated 4-1-1994. The learned Advocate relied upon the Supreme Court decision in the case of Hari Singh v. State of Haryana - 1993 (66) E.L.T. 23 (SC), in which the Supreme Court had observed that the courts of coordinate jurisdiction should have consistent opinions in respect of an identical set of facts or on question of law.
6. We have carefully gone through the facts and circumstances of the case and have given our due thought and consideration to the submissions made by both the sides. Although presently we are concerned only with the disposal of the stay application in view of the earlier proceedings with regard to the related issues, we have thought it just and proper to deal with the matter in somewhat detail. We may, however, add that our observations on merits should not be construed as our final view in the matter.
7. M/s. Geep Industrial Syndicate Ltd. Allahabad, were engaged in the production of torches and dry cell batteries. Each individual torch, wrapped in polythene, was first packed in a duplex board consumer pack. It was the retail pack in which the goods reached the retail buyer. A number of such duplex board consumer packs were placed in a bigger corrugated carton. Depending upon the size/type of the goods big, small, medium, the number of duplex board consumer packs placed in the corrugated carton, and the size of the corrugated carton, varied. These corrugated cartons were embossed / printed with the manufacturer's name, trade mark, monogram, variety/quality of the goods, maximum price etc. The packing in the corrugated cartons was the packing which was necessary for putting these goods in the condition in which they were generally sold in the wholesale market. Even when the goods were stored in their approved godowns, they were stored packed in such corrugated cartons. Except in a single case of some local party, the goods were delivered from the factory as packed in such corrugated cartons. As per their terms and conditions of sale, this packing in cardboard/mill board cartons was their normal packing. Packing in wooden boxes was termed by them as their secon-dary/additonal packing. In their terms and conditions of sale, the nature of packing was stipulated as under :
"Goods shall normally be delivered in the cardboard or mill board cartons. However, at the request of the purchaser the goods can further be packed in wooden boxes in which case the purchaser shall be required to pay extra charges for such secondary/additional packing at such rates as may be determined by the Company from time to time."
Wooden box packing was used by the assessee to deliver the goods to certain specified buyers like DGS & D, and the Defence, whenever specifically desired by them. Similarly in the case of dry cell batteries, after the initial consumer retail packing, a number of duplex board cases were packed in corrugated cartons. The assessee had a number of outstation depots/godowns situated in different parts of the country, and the goods were normally sold from those outstation depots/godowns. Normal packing in the case of torches and batteries manufactured by the applicants had to take note of their storage in their approved godowns, in their outstation depots/godowns, and delivery there from. The nature of the goods had also to be kept in view while considering as what type of packing for the wholesale market was to be applied.
8. The cost towards these corrugated cartons was not included in the value of the goods for Central Excise duty proposes; however, the cost was separately charged by the assessee from their buyers.
9. No wholesale buyer will purchase individual torches or few of the battery cells, which were packed in their primary packing of duplex board cases. The test laid down by The Hon'ble Supreme Court in the case of UOI v. Bombay Tyre International - 1983 (14) E.L.T. 1896 (SC) in para 51 of their judgment is as in what condition the goods are; "generally sold in the wholesale market at the factory gate". The Hon'ble Supreme Court had considered as what could be the primary packing. They have considered the packing in the case of tablets contained in the bottle, and the bottle in a cardboard carton, as a primary packing. To quote; "From the particulars detailed before us by the assessee, it is apparent that the cost of primary packing, that is to say, the packing in which the article is contained and in which it is made marketable for the ordinary consumer, for example a tube of tooth paste or a bottle of tablets in a cardboard carton, or biscuits in a paper wrapper or in a tin container, must be regarded as falling within Section 4(4)(d)(i)". The secondary packing has been taken as larger cartons in which a standard number of primary cartons, are packed. To quote; "Secondary packing is of different grades. There is the secondary packing which consists of larger cartons in which a standard number of primary cartons (in the sense mentioned earlier) are packed." They have held that: "the cost of secondary packing cannot be deducted from the wholesale cash price of the excisable article at the factory gate."
10. The relevant terms and conditions of the sale to the distributors/wholesale dealers have already been extracted above. These terms and conditions provided that the goods could be further packed in wooden boxes - at the specific request, and at the cost of the purchaser. The Hon'ble Supreme Court in the appellant's own case Geep Industrial Syndicate Ltd. v. UOI - 1992 (61) E.L.T. 328 (SC) were concerned with this further packing in wooden boxes. The issue before the Apex Court was summarised as under :
"The question arises only in regard to the wooden boxes in which the cardboard cartons are placed at the time of delivery at the factory gate."
With regard to such wooden boxes in which the cardboard cartons were further placed, the Hon'ble Supreme Court came to a finding that :
"Cardboard cartons were placed in wooden boxes for the purpose of protecting torches and cells against injury or damage during transport and that packing in wooden boxes was not necessary for putting the torches and batteries in the condition in which they are generally sold in the wholesale market at the factory gate."
Thus there is no doubt that the packing prior to the stage of wooden boxes is the packing whose cost is includible in the value of torches and batteries in terms of Section 4(4)(d)(i) of the Act.
11. In the case of UOI v. Godfrey Philips India Ltd. - 1985 (22) E.L.T. 306 (SC), the cigarettes were first packed in the primary packing of the paper/cardboard packets containing ten or twenty cigarette sticks in each packet; thereafter a number of these packets were packed together in the secondary packing of paper/cardboard cartons/outers. Upto this stage (when a number of paper cardboard packets are packed together in paper/cardboard/cartons/outers), there is no doubt that the cost of packing must necessarily be included in the value for the purpose of levy of excise duty. It was only with regard to the further packing in corrugated fibreboard containers (CFBC). that the Hon'ble Supreme Court observed in para 24 that : "It is only for the sake of convenience in the matter of smooth delivery of cartons in which the packets of cigarettes are packed that the cartons may be further packed in corrugated fibreboard containers for facility of transport and smooth transit of the cartons before delivery of the same to the wholesale buyer." The Hon'ble Supreme Court held in para 28 that: "the cost of the further packing of the cartons in which the packets of cigarettes are packed in the corrugated fibreboard containers cannot be included in the value for the purpose of assessment of excise duty."
12. In the case of Collector of Central Excise v. Ponds India Ltd. - 1989 (44) E.L.T. 185 (SC), the Hon'ble Supreme Court have laid down in para 14 of their judgment, the test with regard to the cost of packing as : "What is the condition of packing considered by the manufacturers having regard to the nature of the business, the type of goods concerned, the unit of sale in the wholesale market and other relevant considerations to be generally necessary for placing the goods for sale in the wholesale market at the factory gate."
13. Thus it seems apparent that the packing upto the stage of corrugated cartons in which duplex board retail packs were packed, was the packing employed in the ordinary course of sale by delivery in the wholesale market at the factory gate, and the cost of such packing was includible in the value of the excisable goods.
14. The applicants have referred to the Tribunal's interim/interlocutory order on their earlier stay application, and have pleaded that following that, this stay application should also be allowed. With due respects, in view of the above discussion leading to the prima facie conclusion that the cost of corrugated cartons was includible in the value of the goods in question, we fail to persuade ourselves to follow that interim order. As we have discussed above, the Hon'ble Supreme Court's decision in the applicant's own case was with regard to the further packing in wooden boxes which was considered as not necessary for putting the torches and the batteries in the condition in which they were generally sold in the wholesale market at the factory gate. Other cases quoted on behalf of the applicants in the earlier stay matter only related to the further packing in wooden boxes or third stage packing. Further, as held by the Hon'ble Supreme Court in the case of Empire Industries Ltd. v. UOI -1985 (20) E.L.T. 179 (SC) and the Tribunal in the case of Nissan Rubber v. CCE -1993 (63) E.L.T. 257 (Trib.), the interlocutory orders had no precedent value. The present stay application before us is an independent stay application filed by the appellants under Section 35F of the Act praying for dispensation with the pre-deposit of the duty demanded as per the impugned order. As per the Hon'ble Supreme Court decision in the Empire Industries case, referred to above, when even the interim order already passed can be varied or altered, there is no reason as why we could not come to our independent decision on merits on the independent stay application argued before us. In para 53 of their judgment, the Hon'ble Supreme Court have held as under :
"Every Bench hearing a matter on the facts and circumstances of each case should have the right to grant interim orders on such terms as it considers fit and proper and if it had granted interim order at one stage it should have right to vary or alter such interim orders."
15. In the case of Moti Ram Tola Ram v. CCE 1987 (29) E.L.T. 278 (Tribunal), the Tribunal in para 19 have held that in taxation matters there is no estoppel and the Revenue is not precluded from contending that the subsequent consignments had not fulfilled the conditions of the notifications.
16. The matter had yet to be finally decided between the parties. Therefore, the Supreme Court's observations in the case of UOI v. Paras Laminates (P) Ltd. - 1990 (49) E.L.T. 322 (SC) are not applicable to the situation before us. Similarly the case of Hari Singh v. State of Haryana - 1993 (66) E.L.T. 23 (SC) relied upon by the applicants, the matter did. not relate to the passing of interlocutory orders. It was a murder case in which earlier a SLP had been dismissed. The Hon'ble Supreme Court ruled out the applicability of the doctrine of precedent even in such a case. It was observed in para 10 of their judgment that before any such principle is applied, it must be held that the earlier order passed amounted to a judgment or an affirmness of the findings about the manner of the occurrence, nature of offence committed etc. They held in para 12 that : "The doctrine of precedent is not applicable to an order passed by this Court rejecting a special leave petition. Any such order cannot be held to be stare-decisis so that it is binding on us".
17. The applicants have not pleaded any financial hardship.
18. In disposing of the present stay application, we may refer to the Hon'ble Supreme Court's decision in the case of Union Territory of Pondicherry v. P.V. Suresh - 1993 AIR SCW 3549, wherein the Apex Court in para 15 of their judgment, have held as under :
"Passing of interim orders is not and cannot be a matter of course nor a matter of charity. In matters touching public revenue, the courts ought to be more cautious. For better or worse, the courts have come to acquire a veto over the public exchequer. This power should be exercised with good amount of self-restraint and with a sense of responsibility. The power is coupled with accountability-accountability to the Constitution, to the laws of the land and above all to ourselves."
19. Taking all the relevant considerations into account, we are of the opinion that the pre-deposit of the duty demanded in the facts and circumstances of this case would not cause undue hardship to the appellants. However, taking note of the earlier proceedings with regard to the related issues, in the interest of justice, we order the appellants to deposit only a sum of Rs. 5 lakh (Rupees five lakhs only) in cash (out of the duty demanded amounting to Rs. 8,91,022.93) within 12 weeks of the receipt of this order. On depositing the above sum within the time as stipulated above, the pre-deposit of the balance duty amount shall be dispensed with and recovery thereof stayed till the disposal of this appeal. If the appellants fail to deposit the above sum of Rs. 5 lakhs (Rupees five lakhs only) within 12 weeks of the receipt of this order, then this order shall be automatically vacated, and the appeal shall also be liable for rejection.
20. To come up for compliance after 15 weeks of the date of despatch of this order.