HINDUSTAN POLYMERS ETC. ETC. versus COLLECTOR OF CENTRAL EXCISE, ETC. ETC.

Citation: [1989] 3 S.C.R. 974 · Decided: 23-08-1989 · Supreme Court of India · Bench: SABYASACHI MUKHERJI · Disposal: Appeal(s) allowed

Cited by 3 judgment(s) · cites 2 · see the full citation network in Lexace

Judgment (excerpt)

HINDUSTAN POLYMERS ETC. ETC. 
• 
A 
A 
v. 
COLLECTOR OF CENTRAL EXCISE, ETC. ETC. 
AUGUST 23, 1989 
B 
[SABYASACHI MUKHARJI, S. RANGANATHAN AND 
~ 
J.S. VERMA, JJ.] 
t 
Central Excises and Salt Act, 1944: Sections 2(f}, 3, 4(4}(d), 
35(L)(b) & First Schedule Tariff Item No. 68-Fusel oil/Styrene 
--
Monomer-Drums supplied by buyer-Value of drums-Whether to be 
l 
excluded from 'assessable value'. 
c 
The appellant company /assessee manufactures and sells fusel oil/ 
-{, 
styrene Monomer falling under Tariff Item No. 68 of the 1st Schedule to 
the Central Excises and Salt Act, 1944. The said fusel oil/styrene 
Monomer is sold in bulk and generally delivered to the customers at the 
D 
appellant's factory in road tankers. Some times it is supplied in drums 
brought by the rnstomers who are not charged anything for those 
drums. In the case of Styrene Monomer, the finding is that the supply 
was in tankers to the extent of 90% and only 10% of the sales were made 
in drums. 
j 
E 
Two notices were issued to the appellant to show cause as to why 
the value of the drums should not be included in the assessable value of 
the goods. In reply, the appellant contended that as the drums were 
.. 
supplied by the buyer the value thereof could not be included in the 
assessable value. The Assistant Collector however included the value of 
the drums in the assessable value of the said fusel oil/Styrene Monomer. 
-~ 
F 
The Collector (Appeals) allowed the appellant's appeal and held that it 
was not open to the Assistant Collector to inflate the assessable value 
withont establishing the receipt of the additional consideration by the 
appellant apart from what had been shown in the invoice. The Customs, 
Excise and Gold (Control) Appellate Tribunal allowed the further 
appeal filed by the Revenue and held that at the time of removal the 
G 
goods were delivered from the factory in packed condition and the 
containers were not returnable by the buyer, therefore, the value had to 
be included in the assessable value. 
~ 
Before this Court it was contended on behalf of the appellant that 
it was not all packing that was liable to be included under s. 4(4)(d)(i) of 
H 
the Cnstoms and Central Excises Act, it was only that degree of secon-
974 
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HINDUSTAN POLYMERS v. COLLECTOR OF C.E. 
975 
}. 
dary packing which was necessary for the assessable article to be placed 
in the condition in which it was sold in the wholesale market at the 
factory. gate which could be included in the assessable value of the 
article; fusel oil/Styrene Monomer was sold in bulk and was capable of 
being so sold, hence it was not necessary for the said fuse! oil/Styrene 
Monomer to he supplied to the customer in drums; the dnty of excise 
~ was payable on manufactured goods and no duty of excise could be 
collected from the appellant on such drums which were neither 
manufactured nor purchased by the appellant; the duty being on the 
activity of ma.mfacture whatever was necessary to bring the goods into 
existence alone could be taken into account for duty purposes; and the 
~, sub-section did not contemplate the inclusion of the cost of packing in 
· 
the value of goods when the packing was supplied by a customer to a 
f 
manufcturer on its own cost. 
On behalf of the Revenue the learned Attorney General contended 
that the value of drums/containers would also have to be included on a 
correct interpretation of charging sections, namely, sections 3 and 4 of 
the Act; the terms of section 4(4)(d)(i) were very clear and specific; it 
was a well settled principle of construction that in taxing statutes one 
had only to look at what was clearly stated, and there was no room for 
any intendment; percentages of sales did not in any manner affect 
·--'.._ determination of the assessable value of the excisable goods; though 
"manufacture" was the taxable event, the measure of the levy Dlf...~d not 
be and was not to be restricted to the cost of manufacture; it is open to 
Parliament to prescribe any measure by reference to which the charge 
was to be levied and this is what was done under section 4; and in 
construing s. 4(4)(d)(i). all that had to be seen was whether the goods 
were delivered in packed conditions and if this question was answerable 
in the affirmative, then, in respect of the goods so sold, the cost of 
J packing, whether incurred by the manufacturer or by the supplier, had 
to be automatically included in the assessable value, if necessary, by 

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