ORDER
Lajja Ram, Member (T)
1. In this appeal filed by M/s. Eastend Paper Industries, Calcutta, the point for our consideration is whether ‘ while assessing the papers to central excise duty and determining its value, the duty of the wrapping paper, which is used for wrapping the papers, has to be included for determining the assessable value of the finished paper so cleared. The appellants have contended that as the wrapping paper was already duty paid, inclusion of the duty in the value of the paper so wrapped will amount to double levy. The Collector of Central Excise (Appeals), Calcutta has affirmed the order of the Asstt. Collector, who had held that the refund claim of the assessee with regard to the excess duty of wrapping paper being used as primary packing of another product was not maintainable.
2. The matter was posted for hearing on 12-4-1996 when Shri P.K. Jain, SDR appeared for the Revenue. No one is present for the appellants. A notice of today’s hearing had been issued to them as early as on 31-1-1996. But there is no response.
3. Shri P.K. Jain, SDR stated that while arriving at the assessable value of the excisable goods, the cost of the packing has to be included. The cost will include the excise duty paid with regard to the packing materials. There is a specific provision in the law that when the goods are sold in packed condition that cost of packing is a part of the value. As in the present case wrapping paper, which was vised as packing, was excisable and dutiable and proper duty had been paid thereon, the excise duty on such wrapping paper had to be taken into account for arriving at the assessable value of the papers packed and cleared. He referred to the Tribunal’s earlier decisions in the case of Gwalior Rayon Silk Mfg. (Wvg.) Co. Ltd., Mavoor v. CCE, Cochin – 1985 (20) E.L.T. 364 (Tribunal) wherein it has been held that the value of the wrapping paper was includible in the assessable value of other varieties of paper when such duty-paid wrapping paper was used for captive consumption in wrapping other varieties of paper manufactured in the same factory. He also referred to the Gujarat High Court’s decision in the case of Mahendra Mills Ltd. v. Union of India -1988 (36) E.L.T. 563 (Guj.).
4. We have carefully considered the matter. Accordingly to Section 4(4)(d) of the Central Excises & Salt Act, 1944, the value in relation to any excisable goods, where the goods are delivered at the time of removal in a packed condition includes the cost of such packing except the cost of the packing which is of a durable nature and is returnable by the buyer to the assessee. The cost of the packing will include the excise duty if so leviable on such goods. While arriving at the assessable value of the finished products, the cost of the raw materials/packings had to be taken into account. The Hon’ Supreme Court in the case of Kirloskar Bothers Ltd. v. U.O.I. -1992 (59) E.L.T. 3 (SC) had observed that while determining the assessable value of the pump excise duty already paid on electric motor was to be taken into account. They had observed that the value of the excise duty paid paid on electric motor was not deductible while arriving at the assessable value under Section 4 of the Act. In the case Mahendra Mills Ltd. v. U.O.I. -1988 (36) E.L.T. 563 (Guj.), it has been held that the excise duty payable on manufactured yarn was includible in the manufacturing cost of the fabrics.
5. The appellants had referred in their written submissions to a decision of the Tribunal in the case of Shree Rayalaseema Paper Mills Ltd. v. CCE -1983 ECR 281 (CEGAT), wherein the Tribunal had observed that once the wrapping paper has been assessed to excise duty as wrapping paper prior to its usages for packing or wrapping of other varieties of paper the duty on it cannot be charged in the second time while adding its value to other varieties of papers and subjecting the double value of the duty to central excise duty. In view of the decisions of the Hon’ Supreme Court, High Courts and the Tribunal itself under the new Section 4 with specific reference to the cost of packing, there is no doubt that the cost of the packing is includible in the value of the finished goods.
6. The commodity paper is eligible for proforma credit/Modvat credit, if otherwise eligible for the same. Thus, effectively there is no double levy. The Asstt. Collector had referred to the reply to the show cause notice by the appellants wherein they have stated that in case the wrapping paper was purchased from outside, the manufacturer could have availed of the benefit of proforma credit under Rule 56A of the Rules. Thus, we find no infirmity in the order passed by the ld. Collector (Appeals), Central Excise, Calcutta and accordingly, the appeal is dismissed.