ORDER
Lajja Ram, Member (T)
1. In these two appeals filed by M/s. Dharamsi Morarji Chemical Co. Ltd., the issue for our consideration is that when Alumina Sulphate is cleared from the factory in the powder form and duly packed in, whether the cost of powdering and packing charges form a part of assessable value. The appellants among others were engaged in the manufacture of Alumina Sulphate. A part of the production was delivered in lump form loose. There is no dispute with regard to such Alumina Sulphate cleared loose in lump form. In some cases when the customer so required, the Alumina Sulphate was delivered in powder form. As the goods in powder form could not be cleared without packing, they were duly packed in suitable packing. The appellants have contended that as the goods were delivered in some cases in lump form without packing as such, the cost of powdering and packing should not be included in the assessable value. The ld. Collector of Central Excise (Appeals), Bombay had held that when the goods were supplied in powdered form, powdering charges were collected from the customers. This powdered Alumina Sulphate was packed for delivery. According to him packing charges and powdering charges had to form part of the value. He had observed that the goods could not be supplied loose.
2. Both the appeals were posted for hearing on 22-4-1996. The appellants have requested for decision on merits. On behalf of the respondents/revenue, Shri P.K. Jain, ld. SDR is present.
3. Shri P.K. Jain, ld. SDR stated that the appellants were engaged in the manufacture of Alumina Sulphate which was excisable and assessable to duty under Item No. 68 of the old Central Excise Tariff. When the goods were delivered in the lump form, duty was determined on that basis. In case the Alumina Sulphate was supplied in powder form, it has to be assessed to duty in that form. He referred to the provisions of Section 4 of the Central Excises & Salt Act, 1944 and submitted that the form in which the excisable goods are delivered to the buyer at the factory gate is relevant for the valuation.
4. We have carefully considered the matter. The issue is not whether powdering of Alumina Sulphate in lump form is a process of manufacture or not. The issue for consideration is that when Alumina Sulphate is delivered in powder form, whether the cost of the Alumina Sulphate in lump form should be the basis for assessing to duty the Alumina Sulphate in powder form. The goods have to be assessed to duty in the form delivered to the buyer at the factory gate. In this case the Alumina Sulphate was delivered to the buyers in powder form, and it is the price of such Alumina Sulphate in powder form that has to be determined under Section 4 of the Act. To our mind, the cost of powdering will enter into the value of the powdered Alumina Sulphate.
4A. As regards the packing, there is nothing on record to show that the packing was of a durable and returnable nature. Ld. Collector of Central Excise (Appeals) had observed that the Powdered Alumina Sulphate was delivered in packed condition. He had further observed that the powdered Alumina Sulphate could not go out of the factory in a loose condition. They were packed in 50 kgs bags. As this packing was a normal packing for delivery of the excisable goods at the factory gate and was not a returnable or durable packing, its cost has to be included for determining the assessable value for the powdered Alumina Sulphate.
5. The appellants have contended that the packing was not their product. It is not material whether packing is the product of the assessee or is purchased from outside. What is material is whether the goods are delivered in the packed condition as stipulated under Section 4 of the Act.
5A. Further, we have observed that the issue is not whether powdering of the lump Alumina Sulphate is a process of manufacture. There is no doubt that the assessee was engaged in the manufacture of Alumina Sulphate which could be delivered in different forms. In such a situation the form in which the goods are delivered is material and relevant for arriving at the assessable value.
6. Taking all the relevant considerations into account, we do not find any merit in both these appeals and the same are rejected. Ordered accordingly