Law: Central Excise and Salt Act, (I of 1944)

Section: 4(4)(d)(i)

[Central Excises and Salt Act ( I of 1944)]........S 4(4)(d)(i)--Packing material--Levy of duty--Manufacturer selling glass bottles packed m gunny bags and cartons--No evidence of agreement that cartons and gunny bags were returnable--Levy of duty on such material held, was proper. What section 4(4)(d)(i) excludes from computation is cost of packing which is of a durable nature and is "returnable by the buyer to the assessee". The packing must be one which is returnable by the buyer to the assessee and obviously that must be under an arrangement between the buyer and the assessee. It is not the physical capability of the packing to be returned which is the determining factor because, in that event the words "by the buyer to the assessee" need not have found a place in the section, they would be superfluous. In the instant case, the company sold to the customers on wholesale basis the glass bottles manufactured by it, packed in gunny bags and cartons which it purchases from the market. There was no evidence of the agreement that the cartons and gunny bags were returnable. Therefore, the levy of excise duty on the packing material m such case would not be illegal. AIR 1987 SC 1774 ref. ORDER SABYASACHI MUKHARJI, J.--This is an appeal under section 35-L of the Central Excises and Salt Act, 1944 (Hereinafter called `the Act'). The Superintendent of Central Excise returned the price list of the appellant with a covering letter stating that the price should include all the cost of packing and packing charges in terms of Section 4(4)(d)(i) of the Act. 2. The appellant, a private limited company, manufactured various types of glass bottles, which were assessed to duty under Item No.23-A of the Central Excise Tariff. According to the appellant it sold to the customers on wholesale basis the glass bottles manufactured by it, packed in gunny bags and cartons which it purchases from the market. According to the appellant further it has been paying duty on the value of the glass bottles including the cost of gunny bags or the cartons in which these are packed at the time of sale. It appears therefore according to the appellant, that it has been paying duty on glass bottles…

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