LexM/S. ROYAL ENFIELD (UNIT OF M/S EICHER LTD.) versus COMMISSIONER OF CENTRAL EXCISE, CHENNAI
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[2011] 9 S.C.R. 1089 > .. M/S. ROYAL ENFIELD (UNIT OF MIS .. EICHER LTD.) A v. COMMISSIONER OF CENTRAL EXCISE, CHENNAI (Civil Appeal No. 4406 of 2010) -4 AUGUST 10, 2011 B [DR. MUKUNDAKAM SHARMA AND ANIL R. DAVE, JJ.] Central Excise Act, 1944 - s.4(4)(d)(i) - Valuation for ourpose of excise duty - Appe//ant-assessee was c manufacturing motorcycles - The motorcycles were cleared by the assessee to dealers located outside the city by sending -#- them to their various depots on stock transfer basis and in packed condition from their factory - Whether the cost of packing charges expended/incurred by appellant-company D was liable to be included in the assessable value of the motorcycles manufactured by appellant-company - Held: The packing given by appellant-company to their motorcycles was necessary for putting the excisable article in the condition in which it was generally sold in the wholesale market at the E factory gate and, therefore, such cost was liable to be included in the value of the goods and the cost of such packing could not be excluded - Central Excise Tariff Act, 1985 - Chapter _, 87. The appellant-assessee was manufacturing F rnotorcycles falling under Chapter 87 of the Central Excise Tariff Act, 1985. Despite the fact that the said rnotorcycles were cleared by the assessee to dealers located outside the city by sending them to their various G "'""'\ ' depots on stock transfer basis and in packed condition from their factory, the assessee did not include the value of packing charges in the assessable value for motorcycles. The appellant charged Rs.190/- as packing charges. The appellant-company filed price declaration 1089 H 1090 SUPREME COURT REPORTS [2011] 9 S.C.R. A for the vehicles sold from their depots and therein declared the depot sale price per vehicle and claimed abatement of Rs.190l- per vehicle towards packing charges. The Assistant Commissioner of Central Excise disallowed the abatement of Rs. 190/- claimed by the s assessee towards the cost of packing. The appellant- company filed appeal before the Commissioner of Central Excise [Appeah~J. which got rejected. Aggrieved, the assE!ssee-company filed appeal before the Tribunal which also was rejected and, therefore, the present c appeal was filed by thE! appellant-company. The question which arose for consideration in the present appeal was as to whether the cost of packing charges expended/incurred by the appellant-company was liable to be includ4~d in the assessable value of the D motorcycles manufactuired by the appellant-company. Dismissing the appeal, the Court HELD:1.1. The provisions of the Central Excise Act, E 1944 indicate that them is express provision in Section 4 of the Act for including the cost of packing in the determination of value for the purpose of excise duty. Sub-Section 4 (d)(i) along with explanation provide that where ge>ods are delivered at the time of removal from the factory gate in a packed condition the value would F include the cost of such packing but would not include such cost of packing which is of a durable nature and is returnable by the buyer to the assessee. [Para 11) [1097- H; 1098-A-B] G 1.2. In the Madras Rubber Factory Ltd. case, a three- Judge BEmch of this Court held that where the goods are delivered in a packed condition at the time of removal the cost of such packing shall be included. While recording the aforesaid conclusion this Court took notice of the H aforesaid definition of value as given in sub-Section 4 of . . .... ROYAL ENFIELD (UNIT OF MIS. EICHER LTD.) v. COMMR. OF 1091 ~ ~ CENTRAL EXCISE, CHENNAI Section 4 of the Act and held that the provision in the sub- A clause is a plain one and does not admit of any ambiguity as what it says is that where the goods are delivered in a packed condition, at the time of removal, the cost of such packing shall be included and that only where such packing is of a durable nature and is returnable by the B buyer to the assessee, should the cost of such packing be not included in the value of the goods. The aforesaid decision was rendered by this Court with respect to "tyres" which also were sold at the factory gate in a packed condition for onward easy transportation. In the c background of the said case, it was held that the cost of such packing would be included in the assessable value. Almost similar are the facts of the present case. The authoriti
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