ORDER
U.L. Bhat, J. (President)
1. Appellant engaged in the manufacture of Vinyl Acetate Monomer (VAM) falling under erstwhile Tariff Item 68, was following the procedure under Notification No. 120/75 and paying duty on the prices shown in the invoices. The dispute in the case relates to the period January, 1983 to February, 1985. Show cause notice dated 8-1-1986 was issued stating that appellant had packed VAM in drums or carboys, the cost of which would be includible in the assessable value and appellant had not included the packing cost element in the assessable value and proposing demand of differential duty on that basis and imposition of penalty. Though appellant resisted the notice, the Additional Collector confirmed the demand and imposed penalty of Rs. 2,000/-. This order is now challenged.
2. Shri N.K. Pathak, who represented the appellant contended that VAM is transported either in tankers or otherwise packed in drums or carboys, either belonging to appellant or supplied free of cost by the wholesale buyers. Drums and carboys so used are durable and returnable. Where VAM is packed in drums or carboys belonging to the appellant, the proportionate cost thereof is not shown separately but would be part of the price shown in the invoice. Thus, it is contended where VAM is packed in drums belonging to the appellant, appellant has paid duty on the invoice price which included the element of cost of packing and no differential duty could be claimed in that behalf. So far as VAM packed in drums and carboys supplied free of cost by the buyers is concerned, the cost cannot be included in the assessable value as held in Hindustan Polymer v. CCE -1989 (43) E.L.T. 165 (S.C.). Shri K. Srivastava, SDR contended that the Additional Collector has recorded a finding that the claim of the appellant is not substantiated.
3. Copies of a few of the invoices are before us. Most of the invoices show that the drums and carboys belonged to the owner or supplied by the customer. It is, therefore, clear that Addl. Collector had not properly examined the invoices to verify the contention raised by the appellant that where the drums of the appellant had been used, cost of packing was not collected separately from the suppliers but was included in the invoice price. This aspect calls for verification. The Additional Collector was not justified in demanding duty on the element of cost of packing supplied free of cost by the buyers.
4. For the reasons indicated above, we set aside the impugned order and remand the case to jurisdictional Adjudicating Authority for decision afresh on the question whether duty would be payable on the element of cost of packing where drums or carboys used belonged to appellant. If the appellant had not collected separately the cost of packing in such cases, duty cannot be demanded on the element of cost of packing. Appellant shall be given an opportunity of hearing before a fresh order is passed. The appeal is allowed.