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Central Excise Act, 1944- For determining the value of goods for the purpose of excise duty, cost of packing the goods to be included

October 3, 2011
ROYAL ENFIELD (UNIT OF M/S EICHER LTD) V COMMISSIONER OF CENTRAL EXCISE(SC) Civil Appeal No. 4406 of  2010 Decided on: 10/08/2011 The appellant Company ("ROYAL ENFIELD (UNIT OF M/S EICHER LTDROYAL ENFIELD (UNIT OF M/S EICHER LTD ”) engaged in the manufacture of motorcycles falling under Chapter 87 of the Central Excise Tariff Act, 1985. The issue relates to non-inclusion of the value of packing charges by the assessee-company in the assessable value for motorcycles despite the fact that the said motorcycles were cleared by the assessee to the dealers located outside Chennai by sending them to their various depots on stock transfer basis and in packed condition from their factory The Supreme Court of Delhi dismissed the appeal on the following grounds: i) The express provision in Section 4 of Central Excise Act, 1944 includes the cost of packing in the determination of value for the purpose of excise duty. Sub-Section 4 (d) (i) along with explanation having relevant bearing on the present case. ii) When such packing is necessary for putting the excisable article in the condition in which it is generally sold in the wholesalemarket at the factory gate. then its cost is liable to be included in the value of the goods; and if it is not, the cost of such packing has to be excluded.”
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