Section 4 :Cost of packing for safe transport isn't includible in value of goods

Cost of packing/safety material meant for safe transport isn't includible in value of goods

[2015] 57 taxmann.com 296 (SC)

SUPREME COURT OF INDIA

Commissioner of Central Excise, Chennai

v.

Addisons Paints & Chemicals Ltd.

Section 4 of the Central Excise Act, 1944 - Valuation under Central Excise - Transaction value - Packing - Period prior to 1-7-2000 - Assessee, a manufacturer of paints and varnishes, used to pack them in tins and plastic containers, which were then put in carton boxes for purpose of transportation - Similarly, in another case, a manufacturer of parts of sheet glass used wooden packing for safety during transport - Assessees claimed that cost of cartons/wooden packing was not includible in value - HELD : Packing is includible in value only if it is done in order to put goods in marketable condition and not when goods are capable of reaching market without said packing - If goods are generally sold in wholesale market at "factory gate", use of cartons for transportation "from factory gate" for sale to individual customers or as stock transfers cannot be included in value - Similarly, since wooden packing is not a requirement for sale at "factory gate", same cannot be included in value [Paras 6 to 8] [In favour of assessee]