COMMISSIONER OF CENTRAL EXCISE, CALCUTTA versus M/S. HINDUSTAN NATIONAL GLASS AND INDUSTRIES LTD.

Citation: [2005] 2 S.C.R. 744 · Decided: 11-03-2005 · Supreme Court of India · Bench: RUMA PAL · Disposal: Dismissed

Cited by 2 judgment(s) · cites 1 · see the full citation network in Lexace

Judgment (excerpt)

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A 
COMMISSIONER OF CENTRAL EXCISE, CALCUTTA 
v. 
M/S. HINDUSTAN NATIONAL GLASS AND INDUSTRIES LTD. 
MARCH 11, 2005 
B 
[RUMA PAL, ARIJIT PASAYAT AND C.K. THAKKER, JJ.] 
--
Central Excises and Salt Act, 1944 : 
Section 4(4)(d)(i)-Assessable value of glass bottles-Determinati~n of-
c Cost of packing, if inclusive-Assessee manufacturing glass bottles and buyer -
using the same for packing its products-Bottles delivered in loose condition 
at factory gate in course of wholesale trade-At option of buyer goods packed 
for safe transit by assess~e and cost reimbursed to them and in some cases 
~ 
b?Lyer supplying packing materials and assessee charging initial packing 
D 
charges-Tribunal held that the packing charges collected by assessee .not 
includible in the assessable value qf glass bottles except initial packing charges 
towards packing of goods in durable and returnable containers-On appeal 
held : Decision of Tribunal based on factual finding that ,packing is not 
11ecessary for the articles in condition in which it is generally sold in the 
wholesale market at the factory gate and cannot be termed perverse-Hence, 
E order of Tribunal upheld 
Section 11 A -Assessee challenging in Writ Petition demand of duty 
r'!ised-lnterim Order and subsequent extension thereof-Issue ofshow cause 
notices during pendency of Writ Petition, demand being subject to the decisiQn 
-
of High Court-If barred by limitation-Held : Order of High Court stayed 
F only recovery/collection and not levy-There is difference between levy and 
collection-Moreover, Department issued notices as the interim order did not 
restrain issuance of notices-Thus, Tribunal rightly held that notices barred 
by limitation. 
G 
Respondent-assessee is engaged in manufacturing of various types 
of glass bottles and the buyers use the same for packing consumer products 
like milk, soft drinks, medicines, hair-oil, beer etc. manufactured by them. 
--.-
According to the assessee, these bottles are delivered by it in loose 
condition without packing at the factory·gate in the course of wholesale 
trade. In many cases at the option of the buyer goods are packed for safe 
H 
744 
~ 
C.C.E.CALCUTIAv.HJNDUSTANNATIONALGLASSANDINDUS.LTD. 
745 
transit and the cost is reimbursed by the customer. In some cases buyers A 
supply packing material and manufacturer charges ex-factory prices for 
goods along with extra initial packing .charges for extra services rendered. 
In any event, the packing materials used by manufacturer are of durable 
and returnable nature and the buyers are entitled to refund of cost on 
return. 
Assessee got price-lists approved without the inclusion of packing 
charges though these charges were reflected in the price list depending 
upon the type of packing used. Department issued show-cause notices 
totalling in all to 111, raising demand of duty on packing charges realised 
B 
by the assessee. Assessee filed writ petition challenging the notices and C 
subsequent demands raised. Interim order was passed which was further 
extended. High Court disposed of the writ petition. During the pendency 
of the writ petition, show cause notices were issued raising demand of 
duty on packing charges which was subject to the decision of High Court 
in the writ petition. Both the Adjudicating Authority and the Appellate 
Authority confirmed the demand of duty on packing charges. Thereafter, D 
assessee filed appeals before the CEGAT contending that the packing 
expenses are not included in the assessable value; that 24 show cause 
notices were barred by limitation in terms of Section l lA of the Act; that 
interim orders passed by High Court had not restrained issuance of 
show-cause notice; that if Revenue understood that there was restraint E 
on issuing show-cause notices, it could not have issued 77 notiCes; that 
the interim orders related to realization and not levy; that as regards 
nature of investment covered by show cause notice, Adjudicating Authority 
held that the assessment were final, but were provisional in certain aspects, 
and the Appellate Authority held it to be provisional and as such the 
notices were within time. Tribunal allowed the appeals filed by the F 
respondent. It held that the packing charges except initial packing charges 
towards packing of goods in durable and returnable containers, collected 
by the assessee are not includible in the assessable value· of glass and 
glassware; and that the 24 notices were barred by limi

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