1. This was a Revision Application filed before the Central Government which, on transfer to this Tribunal, has been treated as an appeal.
2. In this case, the appellants sold bakery products to M/s. Britannia Biscuit Co., in tin container (cans) and recovered the cost of cans in six instalments. The disputed question to be decided by us is whether the cans were returnable within the meaning of Section 4(4)(d)(i) of the Central Excises and Salt Act, 1944 and the cost of the same was includible in the assessable value of the bakery products. The contention of the appellants is that the cans were returnable and its cost was not to be included in the assessable value. In support of this contention, the learned Advocate, has cited (i) Judgment of Bombay High Court in the case of Sathe Biscuits and Ors. v. Union of India and Ors.
reported in 1984 (17) E.L.T. 39 (Bombay) and (ii) decision of the Bombay High Court in the case of Corn Products Company and Anr. v.Union of India and Anr. reported in 1984 (16) E.L.T. 177 (Bom.).
3. The learned Senior Departmental Representative has submitted that the cans were not returnable within the meaning of Section 4(4)(d)(i) of the Act and hence their cost was to be included in the assessable value following the earlier decision of this Tribunal in the case of Lucky Biscuits Co. v. Collector of Central Excise, Patna 1984 (18) E.L.T. 96. He has argued that from the first day of sale the buyer becomes the owner of the can. The six instalment payments on account of the price of can are not in the nature of security deposit as contended by the appellants, but the total price of the said can. There is no agreement for returning the cans.
4. We have carefully considered the submissions of both sides.
According to the provision of Section 4(4)(d)(i) of the Central Excises and Salt Act, 1944, the cost of packing, which is of a durable nature, and is returnable by the buyer to the assessee is not to be included in the assessable value of the excisable goods. In the instant case, there is no dispute about the durability of the can which is the packing for the excisable product. In the case of Sathe Biscuits and Chocolate Company Ltd. and Anr. v. Union of India and Ors. 1984 (17) E.L.T. 39 decided by the Hon'ble Bombay High Court and in the case of Ahmedabad Manufacturing and Calico Private Ltd., and Ors. v. Union of India 1982 E.L.T. 821 decided by the Division Bench of Gujarat High Court, it was held by the Hon'ble High Courts that if the packing is of durable nature and is returnable under the terms of the contract between the manufacturer and the wholesale buyer, then the cost of packing is excludible from the assessable value for the purpose of excise duty. A similar view was taken by this Tribunal in the case of Lucky Biscuit Co. v. Collector of Central Excise, Patna 1984 (18) E.L.T. 96. In the present case, there was no contract or agreement between the appellants and the buyer to return the cans to the appellants. The cost of the cans was charged to the buyer spread over six equal instalments. Thus, on each occasion of supply of the bakery products, one-sixth of the cost of the can was recovered from the buyer along with price of the goods. This recovery was not in the nature of a security for the return of the can, but it was appropriated by the assessee as the price of the packing alongwith the price of the goods. In the circumstances, the cans were not returnable within the meaning of Section 4(4)(d)(i) of the Act, and cost thereof was includible in the assessable value of the goods. The judgment of Bombay High Court in Sathe Biscuit's case cited by the learned Advocate does not help the appellants, as in that case there was a contract between the buyer and the assessee for return of the packing containers, but there is no such contract in the present case. The judgment of Bombay High Court in the case of Corn Products Co. (India) Ltd. v. Union of India 1984 (17) E.L.T. 39 as relied upon by the learned Advocate is also not helpful to the appellants as the facts of that case were not similar to the present one. In the case of Corn Products Co. the cost of the packing was refunded by the assessee to the buyer, whereas in the present case no such refund was granted and the recovery of the cost of packing from the buyer was final.
5. As a result of the above discussion, we find no reason to interfere with the impugned order and consequently dismiss the appeal.