ORDER
S.V. Maruthi, Member (J)
1. The question for consideration is whether packing charges of white cement cleared by the appellants are includible in the assessable value.
2. The white cement manufactured by the appellants is marketed by them in bags purchased from the market and made of kraft paper laminated with hessian which have already suffered duty of excise. After hearing the objections on a show cause notice dated 18th Feb., 1970 issued by the Range Officer demanding an amount of Rs. 36,548.18. basic excise duty and Rs. 7,309.64 special duty by including the packing charges the Asstt. Collector confirmed the demand. On appeal the Collector remanded the matter for consideration afresh. Thereafter a fresh show cause notice was issued on 13th August, 1973 and the demand was confirmed. The appeal filed by the appellants was dismissed by the Collector.
3. Against the orders of the Collector, the appellants filed a writ petition OP No. 4499/1974 in the High Court of Kerala for quashing the orders of the Collector. They have also inter alia prayed for refund of duty paid under protest by including the packing charges from 13th August, 1969 upto 30th Sept., 1975. The High Court quashed the orders of the Collector and the Asstt. Collector and directed the Asstt. Collector to con sider the matter afresh in the light of directions issued by them.
4. The Asstt. Collector on a consideration of the directions issued by the High Court confirmed the demand. The appeal was dismissed by the Collector. The appellants preferred a revision to the Government of India under Section 36 of the Central Excise and Salt Act, 1944. The Revision was transferred to this Tribunal on its constitution.
5. The contentions of the counsel on behalf of the appellants are :
That the High Court in its judgment disapproved the test applied by the Asstt. Collector and by the Appellate Collector viz. whether or not any white cement is actually sold by the petitoner in an unpacked condition. The High Court also held that the proper test to be applied in this case is as to whether the cement manufactured by the petitioner is capable of being sold otherwise than with packing in question. The High Court also made it clear that it is only on the Asstt. Collector coming to a conclusion that the petitioner’s white cement is incapable of being sold otherwise than in containers that any proceedings could be taken by him for the recovery of alleged short-levy and that if his finding was that the white cement is capable of being sold unpacked, the petitioner would be entitled to a full refund of all excise duty paid on the packing charges. The learned Judge, it was contended, also made it specifically clear that “the burden of establishing that the packing charges so far as this case is concerned is liable to suffer excise duty is on the respondents”. The counsel further contended that in utter disregard of the above directions the lower authorities confirmed the demands. In spite of the High Court holding that the onus of proof that white cement is capable of being sold without the packing is on the department they have not choosen to adduce any evidence, while they have adduced both oral and documentary evidence in support of their contention that the white cement can be sold at the factory loosely without any packing.
6. The counsel further contended that the decision by the High Court of Kerala is binding on the parties before it as even a wrong decision by a court having jurisdiction is as much binding between the parties as a right one and may be superseded only by appeals to higher Tribunals or other procedure like review which the law provides. The judgment of the Kerala H.C. has become final as it was accepted and no appeal was filed by the department. Therefore, the authorities below are bound by the directions issued by the Kerala H.C. In support of his contention he relied upon the following observations of the Supreme Court in State of West Bengal v. Hemant Kumar [AIR 1966 S.C. P 1061].
“The learned Judges of the High Court who rendered the decision on 4-4-1952 had ample jurisdiction to decide the case and the fact that their decision was on merits erroneous as seen from the later judgment of this court does not render it any less the final and binding between the parties before the court.”
He also brought to our attention the following observation of the Kerala High Court reported in Achuthan Nair v. Raman and Ors. [1979 KLT 119]:
“Where the appellate court has acted within its jurisdiction in remanding a case, it is the duty of the subordinate court to carry out the terms of the order of remand because but for the order of remand it had no seisin of the case. The jurisdiction to retry the case is circumscribed by the terms of the order of remand. This is so even in cases where the order of remand is not otherwise sustainable in law. It is not open to the subordinate court to criticise the order of remand passed by the High Court and refuse to act upon it. The court to which a case is remanded has no jurisdiction to enter into question which fall outside the terms of the remand order. In cases where the High Court decides a question before the order of remand, it is not open to it to revise its decision on the ground that it has turned to be wrong on account of subsequent binding decision of the same court or the Supreme Court. But such findings can be reversed in appeal in cases where an appeal lies from its final decision. A subsequent decision of the High Court or Supreme Court in a different case is not a ground for deviating from the terms of the order of remand.”
7. Therefore, he contended that the judgment of the Kerala H.C. is binding on the parties in spite of later judgment of the S.C. in Bombay Tyre International 1983 (14) E.L.T. 1896 (S.C), and the jurisdiction of the lower authorities is confined only to decide the issue viz. to adduce evidence to establish that white cement is incapable of being sold without containers and that it is only on such finding that they can proceed to levy the duty. Whereas the lower authorities have not discharged the onus of proof and proceed to levy duty which is quite contrary to the directions issued by the High Court.
8. As against the above Shri Naik for the department contended that the High Court only discussed the parameters to be followed under the Central Excises and Salt Act specifically with reference to packing and the order should be understood in its totality. The High Court has not decided, whether packing charges should be included or not. When white cement is actually sold in packed condition the question of its capable of being sold in packed condition or not does not arise. The very fact that packing is not excluded in the explanation shows that packing is includible. The Asstt. Collector scrupulously followed the directions of the High Court and gave a specific finding.
9. He also submitted that the issue is now covered by the decision of the Bombay Tyre International. Prior to 1-10-1975 the concept of durable or returnable container is unknown. At any rate there is no evidence of return of bags.
In reply Shri George contended that the finding that without containers the cement gets deteriorated is based on no evidence and therefore opposed to the principles of natural justice.
10. Two issues arise for consideration :
(i) whether the Asstt. Collector and Collector passed the orders in dispute in utter disregard of the directions issued by the High Court.
(ii) whether the packing charges are includible in the assessable value.
We may make it clear that the High Court has not given a finding that the packing charges are not includible in the assessable value. On the other hand it is left to the Asstt. Collector to decide whether the white cement is capable of being sold without a container after taking into relevant considerations.
11. The Asstt. Collector gave the following findings :-
“that white cement can be sold only with packing”.
In support of the above finding he gave the following reasons :-
(a) The appellants have not even once cleared white cement during the past so many years although they claim that it is capable of being sold without packing.
(b) That two other units in the country who produce white cement clear the white cement in packed condition.
(c) Having regard to the high cost of white cement, the manufacturer would ensure that such costly material is not deteriorated if sold in bulk condition and hence packing is a must.
(d) White cement is mostly purchased by industrial consumers for the manufacture of cement based water paints and for other special purposes.
(e) Even in the factory of production white cement is not kept in loose form except in SILOS.
(f) Although the factory of the assessee manufacturing paints is located adjacent to the cement factory, the white cement required for the manufacture of paint is cleared only in packed condition and not in loose condition.
(g) Retail sale of white cement cannot be treated as a test to decide the capability of white cement being sold without a packing.
(h) The nature of packing.
(i) The practice followed by the appellant in clearing the cement in packing condition.
12. The Asstt. Collr. after taking into consideration all these aspects namely the nature of the product and practice followed by the appellant as well as the other manufacturers in clearing the product and the fact that it gets deteriorated without containers gave a finding that it is incapable of being sold without a packing. When the white cement is always cleared in containers, it is difficult for the Asstt. Collr. to prove that it can be cleared without container. He cannot be expected to prove an impossible situation.
13. In view of the above it is difficult to accept the contention that the authorities have not discharged the onus placed on them and that they have confirmed the demand in utter disregard of the directions of High Court.
14. Therefore, the contention that the Asstt. Collector and the Collector confirmed the demand in utter disregard of the directions of the High Court is rejected. In the light of the view we are expressing it is not necessary to refer to the decisions relied upon by the appellants.
15. The next question is whether packing charges are includible in the assessable value. Now it is settled by the decision of the S.C. in Bombay Tyre International -1983 (14) E.L.T. 1896 (S.C.) that 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). Therefore in the absence of evidence that the packing material is returned, it is includible in assessable value. The appeal, therefore, deserves to be dismissed.