COMMISSIONER OF CENTRAL EXCISE, ALLAHABAD versus M/S. HINDUSTAN SAFETY GLASS WORKS LTD .

Citation: [2005] 2 S.C.R. 229 · Decided: 22-02-2005 · Supreme Court of India · Bench: S.N. VARIAVA · Disposal: Appeal(s) allowed

Judgment (excerpt)

... 
-
COMMISSIONER OF CENTRAL EXCISE, ALLAHABAD 
A 
v. 
M/S. HINDUSTAN SAFETY GLASS WORKS LTD . 
FEBRUARY 22, 2005 
[S.N. V ARIA VA, DR. AR. LAKSHMANAN AND S.H. KAPADIA, JJ.] 
B 
Central Excise Act, 1944-Section 4 and 4(4)(d)(i)-Valuation of 
excisable goods for purposes of levy of excise duty-Glass sheets packed in 
wooden crates/boxes for marketing purposes by manufacturer-No agreement C 
or arrangement for returning packing material to manufacturer-Costs of 
packing, if inclusive in assessable value of glass sheets-Held: For the purpose 
of making glass sheets marketable, it cannot be moved without the special 
arrangements of packing it in wooden crates-Hence, cost of wooden crates/ 
boxes is includible in the assessable value of glass sheets-Furthermore, costs 
of wooden crates cannot be excluded by averring that it is for the purposes D 
of protecting the glass but it is only when the goods are capable of being' 
marketed without special packing. 
Section 4(4)(d)(i) and Explanation to the section-Scope and ambit a/-
Discussed 
Respondent - assessees are manufacturers of glass sheets. They 
packed their product- glass sheets in wooden crates/boxes. In Civil Appeal 
E 
No. 3819of1999, Assistant Collector found that the respondents sent glass 
sheets to their own godown in wooden cases, stored and packed them in 
wooden cases for delivery in the wholesale trade and also cleared it from F 
their factory gate and through the depots, packed in wooden cases; and 
as such the cost of wooden crates is includible in the assessable value of 
glass sheets. Respondents filed appeal. Tribunal relied on its previous order 
.based on finding of fact that barring stray instances glass was delivered 
to local customers with just a paper packing interleaved with straws, and 
as such the cost of the wooden cases was not includible in the value of the G 
glass sheets and held in favour of the respondents. Hence the present 
appeals. 
. 
Appellant - department contended that the glass sheets being fragile 
in nature cannot be marketed without special packing or arrangement; 
229 
H 
230 
SUPREME COURT REPORTS 
[2005] 2 S.C.R. 
A and that the respondent - assessee had led no evidence to show that the 
glass sheets were marketable without special packing. 
Respondent - assessee contended that as the previous order passed 
by the Tribunal clearly established that the glass sheets were marketable 
without wooden packing, there was no need to lead proof for the same; 
B and that the packing in the nature of wooden crates is not covered in the 
Explanation to Section 4(4)(d)(i) and, as such its cost would not be 
includible. 
Allowing the appeals, the Court 
C 
HELD: 1.1. Under Section 4(4)(d)(i) of the Central Excise Act, 1944 
the cost of packing is to be included in working out the value of the goods, 
unless the packing is of a dura~le nature and is returnable by the buyer 
to the assessee. The burden to show that the costs of packing is not 
includible is always on the assessee. The Explanation to the section 
D indicates the various types of packing whose costs have to be included. A 
wrapper and/or a container is packing whose cost has to be included. The 
words "wrapper" and "container" are wide enough to include all types 
of wrappers or containers. The further words "any other thing in which 
or on which the excisable. goods are wrapped, contained or wound" also 
show that the term "packing" has a very wide connotation and includes 
E anything used for wrapping and/or containing the excisable goods. The 
Explanation is very wide and includes almost all types of packing. It is 
not possible to give a restricted meaning. It cannot be said that the 
Explanation makes it clear that the packing in the nature of wooden crates 
is not covered and, therefore, its cost would not be includible. 
F 
(233-H; 234-A; 245-Al 
1.2. The question is not for what purpose a particular kind of packing 
is done. The test is whether a particular packing is.done in order to put 
the goods in the condition in which they are generally sold in the wholesale 
market at the factory gate, the cost of such packing would be includible 
G in the va~ue of the goods for assessment to excise duty. Another way of 
testing wo~ld be to see whether the· goods are capable of reaching the 
market without the type of packing concerned. Each case would hav.e to 
be decided on its own facts. (239-E-G) 
Government of India v. Madras Rubber Fact01y Ltd., (1995) 77 ELT 
H 43

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