Customs, Excise and Gold Tribunal - Delhi
Ponds India Ltd. vs Collector Of Central Excise on 28 June, 1991
Equivalent citations: 1991(37)ECR633(TRI.-DELHI)
ORDER P.C. Jain, Member (T)
1. In compliance with the directions of the Hon'ble Supreme Court in their Civil Appeal No. 1867(NM) of 1990 dated 5th Feb. 1991 both the matters, mentioned above, have been heard afresh in the light of the judgment of that Court in the case of Collector of Central Excise v. M/s. Ponds India Ltd.
2. Question involved in both these cases is a common one and revolves around the issue whether the cost of packing of the Master Outer is to be included in the value of the goods, namely TALCUM or face powder for the purpose of assessment of Central Excise duty. In some cases of different quantitative packings the TALCUM/Face powder is initially packed in tin or plastic containers. Later on, a number of such containers are placed in one inner outer separated by partition. Thereafter, a number of such inner outers are placed in one master outer. In packings of the aforesaid goods where there are both inner outers and master outer the dispute is about inclusion of the master outer. Where there is no inner outer and the containers containing the powder are packed only in master outer, there is no dispute about inclusion of such master outer to the value of the excisable goods namely powder. Where both inner outer and master outer are there in packing of the goods and for delivery to the buyers the appellants had been on their own paying duty by including the value of inner outers in the value of the excisable goods namely powder. The dispute, as mentioned earlier, is in respect of master outer.
2.1 The contention of the department has been that the master outer (where inner outer also exists) is necessary for putting the goods in the wholesale market at the factory gate and it is not merely for the purpose of safe and smooth transit of the goods from the factory to the customer's place. The appellants, on the other hand, contend that their wholesale unit of sale is generally the goods contained in the inner outer. The master outer (where an inner outer also exists) is meant only for the safe and smooth transit of the goods packed thereon. Therefore, such a master outer is not necessary for delivering the goods in the wholesale market to the factory gate. Hence, they contend as above in view of the Supreme Court's judgments delivered in (1) Bombay Tyre International Ltd. 1983 ELT 1896 : 1986 ECR 1627(D) : ECR C 663 SC.
(2) Union of India v. Godfrey Philips India Ltd. .
(3) Hindustan Polymers v. CCE 1989 (43) ELT 135 (SC) - 1990 (26) ECR 153 : ECR C 1521 SC.
(4) Geep Industrial Syndicate Ltd. v. Union of India Civil Appeal Nos. 642-45/82 delivered on 2nd April 1986 and (5) (CCE v. M/s. Ponds India Ltd.).
3. Question to be decided in these matters is whether the packing in question, namely master outer (where inner outer exists) is necessary for putting the excisable goods in the condition in which it is generally sold in the wholesale market.
4. After having heard both the sides we are of the view that there is not enough evidence on record to decide the said question. The finding appears to have been given by the two lower authorities more or less on their subjective views without laying down any standard or objective criteria for determining the aforesaid question. We now have from the Hon'ble Supreme Court in their judgment in the case of Pond's India Ltd., mentioned supra, certain objective criteria for determining the aforesaid question. Criteria laid down by the Hon'ble Supreme Court in the judgment of Justice Ranganathan in para 17 of the said Supreme Court's Report in Pond's case are as follows:
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.
We, therefore, remand these matters to the Assistant Collector of Central Excise to decide them afresh in the light of the Supreme Court's judgment in the case of Pond's India Ltd. and our observations above.