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Panyam Cements and Mineral Vs. Collector of Central Excise - Court Judgment

LegalCrystal Citation
CourtCustoms Excise and Service Tax Appellate Tribunal CESTAT Delhi
Decided On
Reported in(1984)(18)ELT31TriDel
AppellantPanyam Cements and Mineral
RespondentCollector of Central Excise
Excerpt:
.....of specific surface more than 3,500 cm2/g (superfine cement)" in a sum of rs. 240/- ex-works plus packing charges in a sum of rs. 50/-per tonne and handling and forwarding charges in a sum of rs. 13/- per tonne (not the subject matter of the instant proceeding); (b) on receipt of the said price-list, the appropriate officer had queried on 29-1-1975 if the aforesaid superfine cement was capable of being delivered without suffering discolouration or deterioration in quality without the protection of suitable packing; (c) in reply the appellant had, on 1st february, 1975, categorically stated that "normally cement should not be despatched without packing as the quality of cement deteriorates and it may not be useful for constructional purposes. the purpose of cement itself will be useless.....
Judgment:
1. The facts in this proceeding, transferred to the Tribunal and heard as an appeal, in terms of Section 35P of the Central Excises and Salt Act, 1944 (hereinafter referred to as the Act), were- (a) the Appellant filed a supplementary price-list effective from 27-9-1974, disclosing a price for wholesale dealers "of grey pyramid Brand Portland Cement of specific surface more than 3,500 cm2/g (Superfine cement)" in a sum of Rs. 240/- ex-works plus packing charges in a sum of Rs. 50/-per tonne and handling and forwarding charges in a sum of Rs. 13/- per tonne (not the subject matter of the instant proceeding); (b) on receipt of the said price-list, the appropriate officer had queried on 29-1-1975 if the aforesaid superfine cement was capable of being delivered without suffering discolouration or deterioration in quality without the protection of suitable packing; (c) in reply the Appellant had, on 1st February, 1975, categorically stated that "normally cement should not be despatched without packing as the quality of cement deteriorates and it may not be useful for constructional purposes. The purpose of cement itself will be useless if it is sent without proper packing"; (d) the Appellant had also enclosed with the reply a test certificate of the National Test House, Sewri, Bombay from which it appears that the sample submitted for test was received in an air-tight tin container; (e) on the next day i.e. 2nd February, 1975, the Appellant wrote again to the appropriate officer a letter purporting to explain further in detail regarding the packing of ordinary portland cement and superfine cement. In the course of the letter, it was, inter alia, stated that - (i) the precautions that are to be taken in the case of ordinary cement for packing should be taken in the case of superfine cement as well; (iii) the only difference between the two is that superfine cement is more than 3,500 cm2/g per gramme; (iv) while there is no question of discolouration even though it is not packed, long exposure to atmospheric moisture will cause deterioration, if the superfine cement is not packed and the cheapest way of packing superfine cement was in gunny bags; (f) the appropriate officer added the packing charges to the price along with handling and forwarding charges as well (which are not now the subject-matter of the instant appeal) and fixed the assessable value at Rs. 303/-per metric tonne; (g) the appropriate officer had relied upon a trade notice dated 23-1-1970 to the effect that the assessable value should be inclusive of packing charges in case the cement is likely to deteriorate if unpacked, as well as the Appellant's clarification in the letters dated 1st and 2nd February, 1975; (h) on Appeal the Appellate Collector held, inter alia, that the superfine variety of cement was sold, so far, in a packed condition only and consequently the packing charges should be included in the assessable value; (a) the cement in question is in no way different from ordinary grey portland cement of I.S. specification 269-1967; (b) consequently, it is eligible for such concessions as are granted to ordinary grey portland cement; (c) the Government of India in F. No. B. 35/1/69-CXI, dated 23rd July, 1969 had categorically held that packing charges should be included in the assessable value of all varieties of cement other than grey portland cement since such varieties have necessarily to be sold packed; (d) if, therefore, packing charges are not to be included, for ascertaining the assessable value of grey portland cement, they should not be included in the assessable value for the cement in question as well; (e) the trade notice of the Collector, Hyderabad dated 23rd January, 1970, had also, categorically, stated that there are only four varieties of cement that are not capable of being delivered without packing, since they would suffer discolouration or deterioration in quality and consequently the inclusion of packing charges in the assessable value may for the present be confined to the said four varieties only. Grey portland cement is not one of them; (f) the cement in question could be sold without packing and the Appellant had sold "a few consignments", for a fact, without any packing; (g) the Appellant's letters dated 1-2-1975 and 2-2-1975 were merely of "a general descriptive nature and cannot be taken as a basis for determining the assessable value"; (h) in the Bombay, Pune and Karnataka Collectorates, packing charges are not added to the assessable value of the cement in question.

3. At the outset, Shri Gopal Prasad, the learned Consultant appearing for the Appellant, sought adjournment of the case, so as to await the decision of the Hon'ble Supreme Court in other similar matters as well as certain clarifications on the issue of "durable and returnable packing" expected to be made on the reopening of the Court after long vacation. We were disinclined to accede to this request, since, in our opinion,- (a)the issue of primary packing, arising in this case, is already decided by the Hon'ble Supreme Court in the case of Union of India and Ors. v. Bombay Tyre International Ltd. etc. (reported in 1983 E.L.T. 1896); (b) even if it may be that the issue of durable and returnable packing is relevant not merely in the context of the amended Section 4 but in the construction of unamended Section 4 as well and is yet to be resolved by the Hon'ble Supreme Court, there is nothing either by way of pleading or evidence in the record of this case to show that it related to durable and returnable packing. We could have considered a remand if there was a plea and no finding was given on it. We could have allowed the plea itself to be raised if the evidence in relation thereto is available on the record but where there was neither a plea nor any evidence to sustain it, the case neither calls for a remand nor can we go into the issue.

4. In the aforesaid case the Hon'ble, Supreme Court has laid down, in so far as primary packing is concerned, (a) the new Section 4 of the Act substantially reflects the position obtaining under the unamended Act. Consequently, the position in regard to the cost of packing is the same under the Act, both before and after the amendment; (b) the degree of packing in which the excisable article is contained will vary from one class of article to another; (c) the cost of primary packing, that is to say, the packing in which the article is contained and in which it is made marketable for the ordinary consumer must be regarded as falling within Section 4(4)(d)(i) and consequently is to be included in the assessable value.

5. Accordingly, it is the cost of packing in which excisable goods are made marketable for the ordinary consumer that has necessarily to be included within the assessable value, regardless of whatever directives may have been issued heretofore in various circulars issued from time to time or stray sales in bulk at the place of removal or the degree of deterioration in the various varieties of cement if sold unpacked.

6. In so far as cement is concerned, ordinarily, it is inconceivable of a sale to the consumer without primary packing. This has even been conceded by the Appellant in the two letters dated 1st February, 1975 and 2nd February, 1975.

7. In the premises, we see no reason to interfere with the order of the Appellate Collector. The Appeal is accordingly dismissed.


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