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PETITIONER: HINDUSTAN POLYMERS ETC. ETC.

       Vs.

RESPONDENT: COLLECTOR OF CENTRAL EXCISE, ETC. ETC.

DATE OF JUDGMENT23/08/1989

BENCH: RANGNATHAN, S. BENCH: RANGNATHAN, S. SAIKIA, K.N. (J)

CITATION:  1990 AIR  731            1990 SCC  (1)  59  JT 1989  Supl.    283    1989 SCALE  (2)838

ACT:     Central  Excises  and Salt Act, 1944:  Sections  2(f),3, 4(4)(d),   35(L)(b)  &  First  Schedule  Tariff   Item   No. 68---Fusel    oil/Styrene   Monomer--Drums    supplied    by buyer--Value of drums--Whether to be excluded from ’assessa- ble value’.

HEADNOTE:     The  appellant company/assessee manufactures  and  sells fusel oil/ styrene Monomer falling under Tariff Item No.  68 of  the  1st Schedule to the Central Excises and  Salt  Act, 1944. The said fusel oil/styrene Monomer is sold in bulk and generally  delivered  to the customers  at  the  appellant’s factory in road tankers. Some times it is supplied in  drums brought  by the customers who are not charged  anything  for those drums. In the case of Styrene Monomer, the finding  is that the supply was in tankers to the extent of 90% and only 10% of the sales were made in drums.     Two  notices were issued to the appellant to show  cause as  to why the value of the drums should not be included  in the  assessable value of the goods. In reply, the  appellant contended  that as the drums were supplied by the buyer  the value thereof could not be included in the assessable value. The  Assistant Collector however included the value  of  the drums in the assessable value of the said fusel  oil/Styrene Monomer.  The  Collector (Appeals) allowed  the  appellant’s appeal  and held that it was not open to the Assistant  Col- lector to inflate the assessable value without  establishing the receipt of the additional consideration by the appellant apart from what had been shown in the invoice. The  Customs, Excise  and  Gold (Control) Appellate Tribunal  allowed  the further  appeal  filed by the Revenue and held that  at  the time of removal the goods were delivered from the factory in packed  condition and the containers were not returnable  by the  buyer, therefore, the value had to be included  in  the assessable value.     Before  this  Court it was contended on  behalf  of  the appellant that it was not all packing that was liable to  be included  under  s. 4(4)(d)(i) of the  Customs  and  Central Excises Act, it was only that degree of secon- 975 dary packing which was necessary for the assessable  article

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to  be placed in the condition in which it was sold  in  the wholesale market at the factory. gate which could be includ- ed in the assessable value of the article; fusel oil/Styrene Monomer  was sold in bulk and was capable of being so  sold, hence  it was not necessary for the said  fusel  oil/Styrene Monomer to be supplied to the customer in drums; the duty of excise  was  payable on manufactured goods and  no  duty  of excise  could be collected from the appellant on such  drums which were neither manufactured nor purchased by the  appel- lant; the duty being on the activity of manufacture whatever was necessary to bring the goods into existence alone  could be taken into account for duty purposes; and the sub-section did not contemplate the inclusion of the cost of packing  in the  value of goods when the packing was supplied by a  cus- tomer to a manufacturer on its own cost.     On  behalf of the Revenue the learned  Attorney  General contended that the value of drums/containers would also have to  be  included  on a correct  interpretation  of  charging sections, namely, sections 3 and 4 of the Act; the terms  of section  4(4)(d)(i) were very clear and specific; it  was  a well settled principle of construction that in taxing  stat- utes  one had only to look at what was clearly  stated,  and there  was no room for any intendment; percentages of  sales did not in any manner affect determination of the assessable value  of the excisable goods; though "manufacture" was  the taxable  event, the measure of the levy need not be and  was not to be restricted to the cost of manufacture; it is  open to Parliament to prescribe any measure by reference to which the charge was to be levied and this is what was done  under section 4; and in construing s. 4(4)(d)(i). all that had  to be  seen  was  whether the goods were  delivered  in  packed conditions  and if this question was answerable in  the  af- firmative,  then, in respect of the goods so sold, the  cost of  packing, whether incurred by the manufacturer or by  the supplier, had to be automatically included in the assessable value,  if necessary, by addition to the sale price,  except only where the packing was of durable nature and  returnable to the manufacturer. Allowing the appeals, this Court,     HELD: (1) The correct position must be found out bearing in mind the essential nature of excise duty. Excise duty  is a  duty  on the act of manufacture.  Manufacture  under  the excise  law  is the process of activity  which  brings  into being articles which are known in the market as goods and to be goods these must be different, identifiable and  distinct articles  known to the market as such. It is then  and  then only that 976 manufacture takes place attracting duty. [986B]     (2)  Section  2(f)  of the Central Excises  &  Salt  Act provides  the  definition  of  the  term  "manufacture".  It states,  inter alia, that manufacture includes  any  process incidental  or ancillary to the completion  of  manufactured product.  In the instant case, the drums even  though  these were ancillary or incidental to the supply of fusel oil  and styrene  monomer, these were not necessary to  complete  the manufacture of fusel oil or styrene monomer. [983B-C, 987D]     (3) In order to be ’manufacture’, there must be activity which brings transformation to the article in such a  manner that  different and distinct article comes into being  which is  known as such in the market. ’If in order to be able  to put it on the market, a certain amount of packing or user of containers  or wrappers or putting them either in  drums  or containers, are required, then the value or the cost of such wrapper or container or drum must be included in the assess-

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able value and if the price at which the goods are sold does not  include that value then it must be so included  by  the very force of the terms of the section. [986C-E]     (4) The clear implication of the use of the word  "cost" in relation to packing in the clause (i) of section  4(4)(d) of the Act is that only packing cost of which is incurred by the assessee, i.e. the seller, is to be included. The use of the  expression  "cost"  could not obviously be  by  way  of reference  to packing for which the cost is incurred by  the buyer. [988B]     Union of India & Ors. v. Bombay Tyre International Ltd., [1984]  1  SCR 347; Collector of Central  Excise  v.  Indian Oxygen  Ltd., [1986] 36 ELT 730; K. Radha Krishaiah  v.  In- spector of Central Excise, Gooty & Ors., [1987] 27 ELT  598; Govind  Pay Oxygen Ltd. v. Asstt. Collector of  Central  Ex- cise, Panaji & Ors., [1986] 23 ELT 394; Alembic Glass Indus- tries  Ltd. v. Union of India & Ors., [1986] 24 ELT 23;  Gur Sahai Sehgal v. Commissioner of Income Tax, Punjab, [1963] 3 SCR  893; A.K. Roy v. Voltas Ltd., [1973] 2 SCR  1088;  Atic Industries Ltd. v. H.H. Dave Assistant Collector of  Central Excise, [1975] 3 SCR 583; Union of India v. Godfrey Phillips India Ltd., [1985] Supp. 3 SCR 123; Union of India v.  Delhi Cloth  & General Mills Ltd., [1963] Supp. 1 SCR  586;  South Bihar  Sugar  Mills  Ltd., etc. v. Union of  India  &  Ors., [1968]  3 SCR 21; Bhor Industries Ltd., Bombay v.  Collector of  Central  Excise, Bombay, [1989] 1 SCC 602 and  Union  of India  v. Godfrey Phillips Ltd., [1985] 3 SCC 369,  referred to. 977     (5)  On  the facts of this case, it is  clear  that  the goods were not sold in drums generally in the course of  the wholesale  trade. There was no evidence that there  was  any necessity  of  packing or putting these in  drums  prior  to their  sale, or to be able to generally to enter the  stream of  wholesale trade or to be marketable. On the other  hand, there was evidence that in the wholesale trade, these  goods were delivered directly in tankers and deliverable as  such. But  as  a  matter of fact, delivery in drums  was  only  to facilitate their transport in small quantities. The manufac- ture  of the goods was complete before these were placed  in drums.  The  completely manufactured product was  stored  in tanks. From these tanks the goods were removed directly  and placed in vehicles for their movement for 90% of the  sales, the vehicle of removal was tankers and for 10% of the sales, the vehicle or removal was drums. In the premises, the value of  the drums with regard to the fusel oil/ styrene  monomer irrespective of whether these were supplied by the  assessee or  not. are not includible in the assessable value  of  the Styrene Monomer. [992A-D]     Per S. Ranganathan, J. (agreeing with the conclusion but resting it entirely on the language of section 4(4)(d)(i) of the Central Excises & Salt Act)     (1) There is ample internal indication in the statute to show  that the cost of packing referred to in s.  4(4)(d)(i) of  the  Central  Excises & Salt Act, 1944 is  the  cost  of packing  incurred by the manufacturer and recovered  by  him from  the  purchaser whether as part of the  said  price  or separately. [994D]     (2) While generally the normal price for which the goods are  sold at the factory gate is to be taken  as  assessable value, an addition thereto has to be made where, in addition to  the  price,  the manufacturer levies a  charge  for  the packing which is intrinsically and inevitably incidental  to placing the manufactured goods on the market. [994F]     (3)  The answer to the question whether the cost of  the

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container should be included in the assessable value or  not would depend upon whether the goods in question are supplied in  a packed condition or not. If the answer is  yes,  three kinds  of situation may arise. Where the  manufacturer  sup- plies  his  own container or drum but does  not  charge  the customer  therefore, then the price of the goods  will  also include  the cost of the’ container. There will be no  ques- tion  of  separate addition to the sale price  nor  can  the assessee  claim a deduction of the cost of packing from  the sale price except where the container is a durable one 978 and  is returnable to the manufacturer. If the  manufacturer supplies  the  drums  and charges  the  customer  separately therefore,  then, under section 4(4)(d)(i), the cost of  the drums to the buyer has to be added to the price except where the  packing is of durable nature and is to be  returned  to the  manufacturer.  If on the other hand,  the  manufacturer asks  the customer to bring his own container and  does  not charge  anything therefore then the cost (or value)  of  the packing cannot be "notionally" added to, or subtracted from, the price at which the goods have been sold by the  manufac- turer. [995B-D]     Per  J.S. Verma, J. (agreeing with Ranganathan, J.  that the conclusion reached on the language of section 4(4)(d)(i) of the Act is sufficient to allow these appeals).     (1) The cost of packing envisaged in section  4(4)(d)(i) of  the Act for determining the "value" in relation  to  any excisable goods is only the "cost of such packing"  incurred by  the  manufacturer and recovered from  the  buyer  except where  the packing is of a durable nature and is  returnable by the buyer to the manufacturer. [995G]     (2)  The "cost of such packing" referred to  in  section 4(4)(d)(i)  does  not include within its ambit the  cost  of packing not incurred by the manufacturer when the packing is supplied by the buyer and not the manufacturer. [995H]

JUDGMENT:     CIVIL  APPELLATE JURISDICTION: Civil Appeal  Nos.  4339- 41/86 & 4176-77 of 1984.     From  the Judgment and Order dated 4.7.85 &  21.6.84  of the  Customs Excise and Gold (Control)  Appellate  Tribunal, New Delhi in Appeal Nos. ED(SB)(T) A. Nos. 513-514, & 544 of 1985(A) & ED(SB) 329 & 324/84-A in Order Nos.  450-452/85-A, 473 & 474/84-A.     Harish Salve, Ravinder Narain, P.K. Ram and D.N.  Mishra for the Appellant.     K.  Parasaran,  Attorney General, A.K. Ganguli,  and  P. Parmeshwaran for the Respondents. The Judgment of the Court was delivered by     SABYASACHI  MUKHARJI,  J. These  appeals  under  Section 35L(b) of the Central Excises & Salt Act, 1944  (hereinafter called ’the 979 Act’) are against the order Nos. 450-452 of 1985A dated  4th July, 1985, 473/184A and 474/84A both dated 21st June,  1984 passed  by  the Customs, Excise & Gold  (Control)  Appellate Tribunal (hereinafter referred to as ’the Tribunal’).     The  appellant is a division of McDowell & Co.  Ltd.  It has  its  factory at, inter alia,  Visakhapatnam.  There  it manufactures  and  sells fusel oil/Styrene  Monomer  falling under Tariff Item No. 68 of the Ist Schedule to the Act. The case  of the appellant is that the said fusel oil is a  com- pletely  manufactured  article and after completion  of  its

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manufacture, it is stored in storage tanks duly approved for this purpose. It is at this stage that the quantity of fusel oil/Styrene  Monomer manufactured, according to  the  appel- lant, is entered in the RG- 1 Register maintained for  goods manufactured  by the appellant. It is also the case  of  the appellant  that the said fusel oil/Styrene Monomer  manufac- tured  by it is sold in bulk and delivered to the  customers at the appellant’s factory. The fusel oil/Styrene Monomer is also capable of being supplied in road-tankers to customers. The  appellant had filed its price-lists in respect  of  the same.  In the said price-lists, which were duly approved  by the  Asstt. Collector, the appellant had shown the value  of fusel  oil/Styrene Monomer at the rate at which  those  were sold in wholesale as "naked Ex-Works and in bulk". According to  the appellant, the manufacture of fusel oil is  complete and  it is the fully manufactured fusel oil/Styrene  Monomer which is stored in the storage tank.     On 2nd July, 1983, a notice in respect of a  consignment was issued to show cause as to why value of the drums should not  be included in the value of the goods. There the  drums had been supplied by the buyer. Another show cause notice as to  why  value of the drums should not be  included  in  the assessable  value of the goods, was issued to the  appellant on  the  5th  April, 1983 pertaining to Gate  Pass  No.  773 whereunder the appellant had cleared 2.4 KI of fusel oil  in drums supplied by the buyer. Replies were duly filed to  the said  show cause notices by the appellant contending,  inter alia,  that as the drums were supplied by the  buyer,  value thereof  could not be included in the assessable  value.  On the 11th August, 1983, two orders were passed by the Assist- ant Collector--one in relation to each of the aforesaid show cause notices. The Assistant Collector included the value of the  drums  in  the  assessable  value  of  the  said  fusel oil/Styrene Monomer. Appeals were filed by the assessee. The same  were allowed by the Collector (Appeals). He held  that the appellant had not collected any amount in excess of  the amount indicated in the price-lists. Therefore, in addition 980 to this amount, according to the Collector (Appeals), it was not  open to the Asstt. Collector to inflate the  assessable value  without  establishing the receipt of  the  additional consideration  by  the appellant apart from  what  had  been shown  in  the invoice. There was a further  appeal  to  the Tribunal. The Tribunal held that at the time of removal  the goods  were delivered from the factory in  packed  condition and the containers were not returnable by the buyer,  there- fore, the value had to be included in the assessable  value. The  Tribunal, therefore, accepted the revenue’s  contention and  restored  the order of the Asst.  Collector.  Aggrieved therefrom,  the  appellant has come up in these  appeals  to this Court.     On  behalf of the appellant, Shri Salve  contended  that the  Tribunal had failed to appreciate the admitted  factual position that the fusel oil/Styrene Monomer manufactured  by the  appellant  is sold in bulk and is capable of  being  so sold. Hence, according to the appellant, it is not necessary for the said fusel oil/Styrene Monomer to be supplied to the customers in drums in the aforesaid situation. The Tribunal, therefore,  it was urged, ought to have held that the  value could  not be included in the assessable value of the  fusel oil/Styrene  Monomer.  It was contended that  in  any  event under  the Act and the Rules, the duty of excise is  payable by the manufacturer on the manufactured goods. The appellant was  not a manufacturer of drums. The said drums  were  sup- plied by the customers for the purpose of filling the  fusel

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oil/Styrene Monomer. No duty of excise, therefore, could  be collected  from the appellant on such drums which were  nei- ther  manufactured  nor purchased by the appellant.  It  was further  urged that on a correct and true interpretation  of Section 4(4)(d)(i) of the Act, the cost of packing could  be included  in the assessable value only when the  packing  is either  manufactured by the assessee or is purchased by  the assessee. The said sub-section does not contemplate, accord- ing  to the appellant, the inclusion of the cost of  packing in  the  value of goods when the packing is  supplied  by  a customer to a manufacturer on its own cost.     It  was contended by Shri Salve, appearing on behalf  of the  appellant,  that  on  a  correct  analysis  of  section 4(4)(d),  the  duty  being on the  activity  of  manufacture whatever  is  necessary to bring the  goods  into  existence alone can be taken into account for duty purposes.  Reliance was placed by Shri Salve as well as by the learned  Attorney General, appearing on behalf of the revenue, on the relevant provisions of the Act and the position as explained by  this Court in Union of India & Ors. v. Bombay Tyre  International Ltd., [1984] 1 SCR 347. 981     Shri  Salve has, however, contended that so far as  this Court is concerned, this question is concluded by the  deci- sion of this Court in Collector of Central Excise v.  Indian Oxygen  Ltd., [1986] 36 ELT 730. Learned  Attorney  General, however, contended that this decision did not deal with  the present controversy. The said decision, according to learned Attorney General, was concerned with the rentals of  certain oxygen gas cylinders supplied by the assessee. Reference was made to the decision of this Court in K. Radha Krishaiah  v. Inspector  of  Central Excise, Gooty & Ors., [1987]  27  ELT 598.  Shri Salve referred to and relied on the  decision  of tile  High Court of Bombay in the case of Govind Pay  Oxygen Ltd.  v. Asstt. Collector of Central Excise, Panaji &  Ors., [1986] 23 ELT 394 as also the decision of the Karnataka High Court  in Alembic Glass Industries Ltd. v. Union of India  & Ors.,  [1986]  24  ELT 23. Learned  Attorney  General  urged before  us  that the question whether  for  determining  the assessable value of the excisable goods sold by the assessee in drums or containers provided by its customers (the asses- see  itself  provided such drums/containers  on  payment  of price  in Civil Appeals Nos. 4339-41 of 1986) the  value  of such  drums/containers would also have to be included  on  a correct  interpretation of charging sections,  namely,  sec- tions 3 and 4 of the Act. It was submitted that while deter- mining  the scope and nature of levy, as contemplated  under section  3 of the Act, of central excise and the measure  of such levy as provided in section 4 of the Act the principles laid  .down in Union of India v. Bombay  Tyre  International Ltd., (supra), should be followed and reliance was placed on the  several decisions of this Court which we will refer  to later. Learned Attorney General emphasised that it is a well settled  principle of construction that in  taxing  statutes one has only to look merely at what is clearly stated. There is  no room, he contended, for any intendment. There  is  no equity  about a tax, it was submitted. There is no  presump- tion as to tax. Reliance was placed for this proposition  by the  learned  Attorney General on the observations  of  this Court  in  Gur Sahai Sehgal v. Commissioner of  Income  Tax, Punjab, [1963] 3 SCR 893 at 898.     Learned  Attorney  General also drew  attention  to  the decision of this Court in A.K. Roy v. Voltas Ltd., [1973]  2 SCR  1088  and also to Atic Industries Ltd.  v.  H.H.  Dave, Assistant  Collector of Central Excise, [1975] 3 SCR 563  at

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568 to emphasise the point that percentages of sales do  not in  any manner affect determination of the assessable  value of the excisable goods. In this connection, it may be  rele- vant to mention that in C.A. 4339-41/86, in respect of which show  notice was issued as to why value of drums should  not be included in the assessable value of fusel oil and Styrene Monomer, 90% of Styrene Mono- 982 mer had been sold directly in tanks and only 10% of  Styrene Monomer had been sold in drums and the show cause notice  on 20th October, 1983 had been issued relating to clearance  of fusel  oil in 45 drums but the said drums had been  supplied by  the  buyer. The Asstt. Collector in  those  appeals  had included  the  costs of such drums in the value  of  styrene monomer. Relying on the two decisions referred to  hereinbe- fore,  learned Attorney General emphasised that  percentages of sales would not in any manner affect determination of the assessable value of the excisable goods. In A.K. Roy’s  case (supra), it was held by this Court that though in that  case that the fact that the assessee had effected sales to whole- sale  dealers only to the extent of 5 to 10% of its  produc- tion  and  that 90-95% of its production  were  only  retail sales would not affect the question of determination of  the assessable  value of the excisable goods with  reference  to its  value in the wholesale market. Therefore,  the  learned Attorney General submitted, the mere fact that the  assessee in  C.A.  No. 4339 of 1986 sold only 10%  of  the  excisable goods  to its buyer where drums were supplied by the  buyers themselves  and that 90% of the sales were  through  tankers belonging  to the customers would not in any  manner  affect the question or determination of the assessable value of the excisable  goods inasmuch as the 10% of its sales to  whole- sale buyers were in drums supplied by the buyers at the time of  removal. According to the learned Attorney General,  the fact that 90% of the goods were supplied in tankers and  not in containers had no relevance at all and the 10% represent- ed  the  entire  quantity of excisable  goods  delivered  in packed  condition. Learned Attorney General  contended  that the decision of Indian Oxygen Ltd.’s case (supra) cannot  be relied  on in view of the facts of this case. In that  case, the  learned  Attorney General contended the  only  question which  arose was whether the rental charges received by  the assessee  for the gas cylinders lent by it to its  customers could be included in the assessable value and whether inter- est earned on deposits made by the customers for the securi- ty  of the cylinders supplied by the assessee could also  be included  in  the assessable value of the  excisable  goods. This  Court  clarified in the said decision  that  the  said charges  could  not be included in the value  of  the  goods since  these were only ancillary and not incidental  to  the activities  for the manufacture of gases.  Learned  Attorney General  submitted that this Court had no occasion  in  that decision  to  consider  the question  which  arises  in  the present  case, namely whether the cost of packing  materials would  have  to be included in the assessable value  of  the goods when goods are delivered in packed conditions. Learned Attorney General submitted that the decisions of the  Bombay and Karnataka High Courts were wrong as they are contrary to the decision of this 983 Court in Bombay Tyre International’s case (supra). Reference was made both by the learned Attorney General and Shri Salve to  the  observations  of this Court in Union  of  India  v. Godfrey Phillips India Ltd., [1985] Supp. 3 SCR 123.     In order to appreciate the controversy in this case,  it

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is necessary to refer to the relevant provisions.     Section  2(f) of the Act provides the definition of  the term "manufacture". It states, inter alia, that  manufacture includes any process incidental or ancillary to the  comple- tion of manufactured product. It is, therefore, necessary to bear in mind that a process which is ancillary or incidental to  the completion of the manufactured product, that  is  to say,   to   make   the   manufacture   complete   would   be "manufacture".  It  is relevant and important to  bear  this aspect  in  mind. Section 3 of the Act provides  that  there shall  be levied and collected in such manner as maybe  pre- scribed  duties of excise on all excisable goods other  than salt which are produced or manufactured in India. "Excisable goods", under section 2(d) of the Act, means goods specified in  the Schedule to the Central Excise Tariff Act,  1985  as being subject to duty of excise and includes salt. Section 4 of the Act provides for the valuation of excisable goods for purposes of charging of duty of excise. The relevant  provi- sion of section 4 of the Act deals with the manner as to how the  value is to be computed and section 4(4)(d)  stipulates as follows:               ""value" in relation to any excisable goods,               (i) 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.               Explanation.--In  this  sub-clause   "packing"               means  the wrapper, container,  bobbin,  pirn,               spool,  reel or warp beam       or  any  other               thing in which or on which the excisable goods               are wrapped, contained or wound;               (ii)  does not include the amount of the  duty               of excise, sales tax and other taxes, if  any,               payable  on  such goods and, subject  t9  such               rules as may be made, the trade discount (such               discount  not being refundable on any  account               whatsoever)  allowed  in accordance  with  the               normal practice of               984               the wholesale trade at the time of removal  in               respect  of such goods sold or contracted  for               sale;               (Explanation.--For  the purposes of this  sub-               clause,  the  amount  of the  duty  of  excise               payable  on any excisable goods shall  be  the               sum total of--               (a)  the effective duty of excise  payable  on               such goods under this Act; and               (b)  the aggregate of the effective duties  of               excise payable               under  other Central Acts, if  any,  providing               for  the levy of             duties of  excise               on such goods ,--               and the effective duty of excise on such goods               under  each Act referred to in clause  (a)  or               clause (b) shall be,               (i)  in a case where a notification  or  order               providing  for  any exemption  (not  being  an               exemption  for giving credit with respect  to,               for reduction or duty of excise under such Act               on  such  goods equal to, any duty  of  excise               under  such Act, or the additional duty  under               Section 3 of the Customs Tariff Act, 1975  (51               of 1975), already paid] on the raw material or

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             component  parts  used in  the  production  or               manufacture  of such goods) from the  duty  of               excise under such Act is for the time being in               force, the duty of excise computed with refer-               ence  to  the rate specified in  such  Act  in               respect of such goods as reduced so as to give               full  and complete effect to  such  exemption;               and               (ii)  in  any other case, the duty  of  excise               computed with reference to the rate  specified               in such Act in respect of such goods."      The  expression  "place of removal"  has  been  defined under  section 4(4)(b) of the Act to mean a factory  or  any other place or premises of production or manufacture of  the excisable goods; or a warehouse or any other place or  prem- ises  wherein the excisable goods have been permitted to  be deposited without payment of duty, from where such goods are removed.  It  is in relation to Section 4(4)(d) that  it  is contended  that  except the cost of packing which  is  of  a durable nature and is returnable by the buyer to the  asses- see to the buyer, in respect of all other costs of  packing, the costs should be included in the value of the 985 excisable  goods.  The explanation to the  said  sub-section defines the expression "packing" as the wrapper,  container, bobbin, pirn, spool, reel or warp beam or any other thing in which or on which the excisable goods are wrapped, contained or  wound.  The  provisions of these two  sections  must  be judged  in  the light of the principles laid  down  by  this Court  in  Union  of India  v.  Bombay  Tyre  International, (supra).  In that decision, it has been recognized that  the measure  employed for assessing a tax must not  be  confused with the nature of the tax, while the measure of the tax may be  assessed by its own standard to serve as a standard  for assessing  the  levy the Legislature need not  contonour  it along  lines which spell out the character of the  levy  it- self.  Reliance  may be placed to the observations  of  this Court at pp. 365-367 of the Report. This Court rejected  the contention  of  the assessee in that case that  because  the levy of excise is a levy on goods manufactured or  produced, the  value  of an excisable article must be limited  to  the manufacturing  cost  plus manufacturing profit.  This  Court reiterated that section 4 of the Act provides the measure by reference  to which the charge is to be  levied.  Therefore, the charge is to be determined by the terms of section 4  of the  Act.  But it has to be borne in mind that the  duty  of excise  is  chargeable with reference to the  value  of  the excisable goods and the value is defined in express terms in that  section. Though the learned Attorney General  referred to the fact that in taxing statutes, one must look merely at what is clearly stated, yet such a construction must be made in  the  context of the entire scheme of  the  Act.  Learned Attorney General emphasised that the language of clause  (d) of  sub-section  (4) of section 4 of the Act made  it  clear beyond doubt that in cases where the Act provides for excise duty  with reference to value of the excisable goods,  while determining  the  value of such goods, the cost  of  packing where  the  excisable  goods are delivered at  the  time  of removal  in packed condition, would have to be  included  in the  assessable value of the excisable goods.  According  to the  learned  Attorney General, since the Act  provides  for only one exception to this measure, namely, non-inclusion of the  cost  of such packing where the packing is  durable  in nature  and is returnable by the buyer to the  assessee,  in all  other  cases the cost of the packing would have  to  be

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included  in  the assessable value of  the  excisable  goods where  such  goods are delivered at the time of  removal  in packed  condition. According to him, the plain  language  of the Statute does not permit of any further exceptions  being read  into  the Act. To hold otherwise,  it  was  contended, would make the provision of the measure of the levy unworka- ble  inasmuch  as in every case the measure  would  have  to differ  in the light of the contentions as may be raised  by the  assessees  depending upon the business  arrangement  of each assessee. 986 It was contended that it is not correct to equate the  meas- ure  of tax with the levy itself which is the basis  of  the contentions of the appellant.     In  my  opinion, however, the correct position  must  be found  out  bearing in mind the essential nature  of  excise duty. Excise duty, as has been reiterated and explained,  is a  duty  on the act of manufacture.  Manufacture  under  the excise  law,  is the process or activity which  brings  into being articles which are known in the market as goods and to be goods these must be different, identifiable and  distinct articles  known to the market as such. It is then  and  then only that manufacture takes place attracting duty. In  order to be goods, it was essential that as a result of the activ- ity,  goods  must come into existence. For  articles  to  be goods,  these must be known in the market as such and  these must be capable of being sold or being sold in the market as such.  See the observations of this Court in Union of  India v. Delhi Cloth & General Mills Ltd., [1963] Supp. 1 SCR 586; South Bihar Sugar Mills Ltd., etc. v. Union of India & Ors., [1968] 3 SCR 21 and Bhor Industries Ltd., Bombay v.  Collec- tor  of Central Excise, Bombay, [1989] 1 SCC 602. In  order, therefore,  to be manufacture, there must be activity  which brings  transformation to the article in such a manner  that different  and  distinct article comes into being  which  is known  as such in the market. If in order to be able to  put it  on  the market, a certain amount of packing or  user  of containers  or wrappers or putting them either in  drums  or containers, are required, then the value or the cost of such wrapper or container or drum must be included in the assess- able value and if the price at which the goods are sold does not  include that value then it must be so included  by  the very force of the terms of the Section. The question, there- fore, that has to be examined in this case is whether  these drums,  containers  or packing, by whatever  name  they  are called,  are necessary to make fusel oil or styrene  monomer marketable  as such or can these goods be sold  without  the containers  or  drums or packing? In my opinion,  the  facts established  that these could be. The fact that 90%  of  the goods  in  C.A. No. 4339 of 1986 were delivered  in  tankers belonging to the assessee and only 10% of the goods were  in packed  condition at the time of removal  clearly  establish that  the  goods  were marketable without  being  packed  or contained in drums or containers. These were in the  storage tanks  of the assessee and were as such marketable. In  this connection, it is necessary to refer to the observations  of this  Court in Collector of Central Excise v. Indian  Oxygen Ltd., (supra). In that case, as mentioned hereinbefore,  the respondent Indian Oxygen Ltd. was manufacturer of  dissolved acetylene gas and compressed oxygen gas, called therein ’the gases’. The respondent supplied these gases in cylinders  at their factory gate. 987 For taking delivery of these gases, some consumers/customers used  to  bring their own cylinders and take  the  delivery,

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while  others  used to have the delivery  in  the  cylinders supplied  by the respondent. For the purpose of such  supply of cylinders, certain rentals were charged by the respondent and also to ensure that these cylinders were returned  prop- erly,  certain amounts of deposit used to be taken from  the customers.  On these deposits, notional interest @ 18%  p.a. was  calculated. The two amounts with which this  Court  was concerned  were  rentals of the cylinders and  the  notional interest  earned on the deposit of cylinders--whether  these two  amounts were includible in the value under s. 4 of  the Act  was the question. The revenue’s case was that  the  no- tional  value  of  deposit was rental and  hence  should  be included in computing the assessable value. The  respondent, however,  disputed this. Analysing the scope of s. 4 of  the Act, it was held by this Court that supply of gas  cylinders might be ancillary activity to the supply of gases but  this was not ancillary or incidental to the manufacture of gases. The goods were manufactured without these cylinders.  There- fore,  the  rental of the same though  income  of  ancillary activity,  was not the value incidental to  the  manufacture and could not be included in the assessable value.  Similar- ly, in my opinion, drums even though these were ancillary or incidental  to the supply of fusel oil and styrene  monomer, these  were  not necessary to complete  the  manufacture  of fusel oil or styrene monomer; the cost of such drums cannot, therefore,  be  included in the  assessable  value  thereof. Furthermore, no cost was, in fact, incurred by the assessee. Drums had been supplied by the buyers.     This  position, in my opinion, was correctly  approached in  the  decision  of the Bombay High Court  in  Govind  Pay Oxygen Ltd. v. Assistant Collector of Central Excise, Panaji &  Ors., (supra), where it was held that section  4(4)(d)(i) of  the  Act does not make any provision for  including  the cost  of  packing  which was supplied by the  buyer  to  the assessee  for the obvious reason that the assessee  did  not spend  for such packing. It was for this simple reason  that the legislature had not thought it fit to exempt such  pack- ing  from the value of excisable goods. In my opinion,  that is the correct approach to the problem. Similarly, Karnataka High  Court in Alembic Glass Industries v. Union of India  & Ors., (supra) held that the term "value" defined in  section 4(4)(d)(i) provides for exclusion of cost of packing materi- al  which  was of durable nature and was returnable  by  the buyer  to the assessee. Hence, there was no logic or  reason for not excluding the value of packing material supplied  by the buyer himself which is of durable nature and is  return- able by the assessee to the buyer. Furthermore, in my  opin- ion, in 988 terms of section, it is not includible. The contention  that the  value of packing materials including those supplied  by the buyer, has to be included in the value of the goods,  is repugnant to the very scheme of section 4. It overlooks  the use  of the expression "cost" in relation to packing in  the clause  (i) of section 4(4)(d) of the Act. The  word  "cost" has a definite connotation, and is used generally in contra- distinction  of  the  expression "value".  Thus,  the  clear implication  of  the  use of the word "cost"  is  that  only packing cost of which is incurred by the assessee, i.e., the seller, is to be included. The use of the expression  "cost" could  not obviously be by way of reference to  packing  for which the cost is incurred by the buyer. It has to be  borne in  mind  that  such a provision would  make  the  provision really  unworkable,  since in making the assessment  of  the seller, there is no machinery for ascertaining the "cost" of

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the  packing  which might be supplied by the buyer.  Such  a contention further overlooks the scheme of clause (i) where- under  durable  packing returnable by the buyer  has  to  be excluded.  It  would create an absurd situation  if  durable packing  supplied  by  the assessee and  returnable  to  the assessee is not to be included in the assessable value but a durable  packing supplied by the buyer to the  assessee  and returnable  to  the buyer is made a part of  the  assessable value.  One has to bear in mind the scheme of clause (d)  of section 4(4) of the Act. The two sub-clauses of this  clause deal  with  abatements or deductions in  respect  of  actual burdens, either by way of an expenditure or discount,  borne by  the assessee. Clause (ii) deals with duties  of  excise, sales  tax and other taxes, if any, payable on  such  goods. Here  also obviously, the reference is not generally to  the taxes  payable on such goods by either the assessee  or  the buyer but is obviously to the taxes payable by the assessee. The  trade  discount  is referable to that  allowed  by  the assessee.  Therefore,  in the same sense, clause  (i)  would only be referable to the packing in respect to which  "cost" is incurred by the assessee. It has to be borne in mind that the scheme of old section 4 of the Act and new section 4  is the  same  as was held by this Court in the case  of  Bombay Tyre International, (supra) at pages 376 E-F, 377-H and  378 A-B,  H  of the Report. The scheme of the old section  4  is indisputedly to determine the assessable value of the  goods on  the  basis of the price charged by  the  assessee,  less certain  abatements.  There was no question  of  making  any additions  to the price charged by the assessee. The  essen- tial  basis of the "assessable value" of old section  4  was the  wholesale cash price charged by the assessee.  To  con- strue new section 4 as now suggested would amount to depart- ing from this concept and replacing it with the concept of a notional  value comprising of the wholesale cash price  plus certain notional charges. This would be a radical  departure from old section 4 and cannot be said to be on the 989 same  basis. It has to be borne in mind that the measure  of excise  duty is price and not value. It has been so held  by this Court in Bombay Tyre International’s case (supra).  See in this connection, the observations of this Court in Bombay Tyre’s  case  at pages 368,377,379,382 and 383,  where  this Court emphasised that in both the old s. 4 and the new s. 4, the  price  charged  by the manufacturer on a  sale  by  him represents the measure. Price and sale are related  concepts and price has a definite connotation. Therefore, it was held that the "value" of the excisable article has to be computed with reference to the price charged by the manufacturer, the computation being made in accordance with the terms of s. 4. This Court rejected the contention on behalf of the assessee in that case, that s. 4 also levied excise on the basis of a conceptual  value  which  must  exclude   post-manufacturing expenses and post manufacturing profit by observing that the contention  proceeded  on the assumption that  a  conceptual value governed the assessment of the levy. It was reiterated that  the old s. 4 and new s. 4 determine the value  on  the basis  of  price  charged or chargeable  by  the  particular assessee.  See in this connection, the observations of  this Court at p. 388 F & G of the report.     It has also to be borne in mind that in any event in  so far  as Styrene Monomer Oil is concerned, the value  of  the drums in which it is packed is not includible in the assess- able  value  of the goods. It is not all  packing  which  is liable to be included under clause 4(4)(d)(i) in the assess- able value of the goods. It is only that degree of secondary

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packing which is necessary for assessable articles to be  in the condition in which it is generally sold in the wholesale market  which  can  be included at the  factory  gate  which should  be  included in the value of the  article.  See  the observations  of this Court in Bombay  Tyre  International’s case  (supra)  at page 393 D & E. In the case  of  Union  of India  v.  Godfrey  Phillips Ltd., [1985] 3  SCC  369,  this position  was  clarified by the majority judgment.  In  that case,  the  respondent therein  manufactured  cigarettes  in their factories. The cigarettes so manufactured were  packed initially in paper/cardboard packets of 10 and 20 and  these packets  were then packed together in  paper/cardboard  car- tons/outers. These cartons/outers were then placed in corru- gated fibreboard containers and delivered by the respondents to  the wholesale dealers at the factory gate. There was  no dispute that the cost of primary packing into packets of  10 and 20 and the cost of secondary packing in cartons/  outers must be included in determining the value of the  cigarettes for  the  purpose of assessment of excise duty,  since  such packing would fall under section 4(4)(d)(i) of the Act.  The question that arose was whether the cost of final packing in corrugated fibreboard containers 990 would  be  liable to be included in the value of  the  ciga- rettes  for  the purpose of assessment to excise  duty.  The question  was answered in negative by a majority of  2:1  of this Court. Chief Justice Bhagwati dissented. It was held by Pathak, J. (as the learned Chief Justice then was) that such cost  of corrugated fibreboard containers could not  be  in- cluded in the determination of "value" in section 4(4)(d)(i) of the Act for the purposes of excise duty. For the  purpose of  measure of levy on cigarettes, the statute has given  an extended meaning to the expression "value in section 4(4)(d) of  the  Act. Plainly, the extension must be  strictly  con- strued,  for  what  is being included in the  value  now  is something  beyond  the value of the  manufactured  commodity itself.  The corrugated fibreboard containers could  be  re- garded  as secondary packing. These were not  necessary,  it was  emphasised by the majority of the Judges,  for  selling the cigarettes in the wholesale market at the factory  gate. These were only employed, it was emphasised by the  majority of the Judges, for the purpose of avoiding damage or  injury during transit. It was perfectly conceivable that the whole- sale dealer who took delivery might have his depot at a very short distance only from the factory gate or might have such transport  arrangements available that damage or  injury  to the  cigarettes could be avoided. A.N. Sen, J.,  who  agreed with  Pathak, J., observed that on a proper construction  of section 4(4)(d)(i), it was clear that any secondary  packing done  for the purpose of facilitating transport  and  smooth transit  of  the goods to be delivered to the buyer  in  the wholesale  trade could not be included in the value for  the purpose  of assessment of excise duty. Chief  Justice  Bhag- wati,  on  the other hand, held that  corrugated  fibreboard containers  in  which  the cigarettes  were  contained  fell within  the  definition of ’packing’ in the  Explanation  to section  4(4)(d)(i) and if these formed part of the  packing in which the goods were packed when delivered at the time of removal, then under section 4(4)(d)(i) read with the  Expla- nation,  the cost of such corrugated  fibreboard  containers would  be liable to be included in the value of  cigarettes. It  is  apparent from the wide language,  according  to  the learned Chief Justice, of Explanation to section  4(4)(d)(i) that  every kind of container in which it can be  said  that the excisable goods are contained would be ’packing’  within

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the meaning of the Explanation. Even secondary packing would be within the terms of the Explanation, because such second- ary  packing would also constitute a wrapper or a  container in  which the excisable goods are wrapped or contained.  But the  test  to determine whether the cost of  any  particular kind  of secondary packing is liable to be included  in  the value of the article is whether a particular kind of packing is done in order to put the goods in the condition in  which they are generally sold in the wholesale 991 market  at the factory gate. If they are generally  sold  in the wholesale market at the factory gate in a certain packed condition, whatever may be the reason for such packing,  the cost of such packing would be includible in the value of the goods  for assessment to excise duty. According  to  learned Chief  Justice, it makes no difference to the  applicability of  the definition in section 4(4)(d)(i) read with  Explana- tion  that the packing of the goods ordinarily sold  by  the manufacturer  in  the  wholesale trade is  packing  for  the purpose of protecting the goods against damage during trans- portation  or  in  the warehouse. However,  if  any  special secondary  packing  is provided by the assessee at  the  in- stance of a wholesale buyer which is not generally  provided as a normal feature of the wholesale trade, the cost of such special packing would not be includible in the value of  the goods.  It may be necessary in this connection to  refer  to the  observations of this Court in Union of India & Ors.  v. Bombay  Tyre  International Ltd., (supra) dealing  with  the aspect  of  secondary packing, where this  Court  reiterated that the degree of secondary packing which is necessary  for putting  the  excisable article in which it is sold  in  the wholesale  market at the factory was the degree  of  packing where  the cost would be included in the value of the  goods for  the purpose of excise duty. Pathak, J., as the  Hon’ble Chief Justice was then, observed whether it is necessary for putting the cigarettes in the conditions in which they  were sold  in  the wholesale market or at the  factory  gate.  He answered that it is not. It was found that these  corrugated fibreboard containers are employed for the purpose of avoid- ing damage or injury during the transit. It was  conceivable that the wholesale dealer who takes delivery might have  its depot at a very short distance only from the factory gate or may  have such transport arrangements available that  damage or  injury  to  the cigarettes could be  avoided.  In  those cases,  the corrugated fibreboard containers,  according  to Pathak, J., were not necessary for selling the cigarettes in the wholesale market.     I  am  of the opinion that the views  expressed  by  the majority of the learned Judges were correct and it  appears, with  respect, that the observations of Chief Justice  Bhag- wati were not consistent with the judgment of this Court  in Bombay  Tyre  International (supra) at p. 379.  The  learned Attorney General sought to suggest that the decision of this Court  in  Union of India v. Godfrey Phillips  Ltd.  (supra) perhaps might require reconsideration. I am unable to accept this suggestion. The ratio of the decision in Godfrey  Phil- lips’  case  (supra) is in consonance with the  decision  of Union  of  India v. Bombay Tyre  International  (supra)  and further  in  consonance  with the true basis  of  excise  as explained  in  several decisions mentioned  before.  In  the premises, on 992 the facts of this case, it is clear that the goods were  not sold  in  drums  generally in the course  of  the  wholesale trade. There was evidence that 90% of the goods were  deliv-

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ered  at  the time of removal without being  put  in  drums. There was no evidence that there was any necessity of  pack- ing  or putting these in drums prior to their sale.  It  was not  necessary that the articles were to be placed in  drums for  these  to be able to generally to enter the  stream  of wholesale  trade  or to be marketable. On  the  other  hand, there was evidence that in the wholesale trade, these  goods were delivered directly in tankers and deliverable as  such. But  as  a  matter of fact, delivery in drums  was  only  to facilitate their transport in small quantities. The manufac- ture  of the goods was complete before these were placed  in drums.  The  completely manufactured product was  stored  in tanks. From these tanks the goods were removed directly  and placed in vehicles for their movement--for 90% of the sales, the vehicle of removal was tankers and 10% of the sales, the vehicle of removals was drums. In the premises, the value of the  drums  with  regard to the  fusel  oil/styrene  monomer irrespective of whether these were supplied by the  assessee or  not, are not includible in the assessable value  of  the Styrene Monomer.     In the aforesaid view of the matter, I am of the opinion that these appeals have to be allowed and the orders of  the Tribunal  set  aside. The Tribunal was in error  in  holding that  as at the time of removal, goods were  delivered  from the factory in packed condition and the containers were  not returnable to by the buyer, the value of the drums is to  be included. It is reiterated that in order to be  deliverable, it  is not necessary that the goods should be  delivered  in packed condition and that the containers were not  necessary to make the goods marketable.      In  the aforesaid view of the matter, the  appeals  are allowed  and the orders of the Tribunal are set  aside.  The value of the aforesaid drums should, therefore, be  excluded from the assessable value for the purpose of excise duty. In the  facts and the circumstances, however, there will be  no order as to costs.      RANGANATHAN, J- I have perused the judgment proposed to be delivered by my learned brother Sabyasachi Mukharji, J. I agree with the conclusion arrived at by him but I would like to rest it entirely on the language of S. 4(4)(d)(i) of  the Central  Excises  & Salt Act, 1944, without going  into  the larger  questions  raised by counsel and dealt  with  by  my learned brother. 2.  The assessee company is manufacturing and selling  fusel oil. 993 It  also  manufactures  and sells another  liquid  known  as styrene  monomer.  The fusel oil and  monomer  are  supplied generally in tankers brought by the customers- Sometimes  it is  supplied in drums provided by the customers who are  not charged  anything  for those drums. In the case  of  styrene monomer, the finding is that the supply is in tankers to the extent of 90% and only 10% of the sales were made in  drums. The  issue  before us is whether the costoat  of  the  drums supplied by the customer for which he is not charged  should be  included in the assessable value of the goods  in  ques- tion: in other words, whether a notional amount representing the  cost  of the drums should be added to  the  sale  price charged by the assessee to its constituents.     3.  Shri Harish Salve, arguing for the appellants,  con- tended that the cost of packing referred to in S. 4(4)(d)(i) is such cost incurred by a manufacturer and not the cost  of packing borne by the buyer. In the alternative, he contended that atleast so far as styrene monomer sales are  concerned, the  cost  of drums cannot enter into  the  picture.  Citing

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several  previous authorities of this Court he contended  on the following lines:               "It  is not all packing that is liable  to  be               included under s. 4(4)(d)(i). It is only  that               degree of secondary packing which is necessary               for the assessable article to be placed in the               condition in which it is sold in the wholesale               market  at the factory gate which can  be  in-               cluded in the assessable value of the article.               On  the facts of this case, there is  evidence               that  90% of the monomer was delivered at  the               time  of removal without being put  in  drums.               There  was  no  evidence that  there  was  any               necessity of packing or putting them in  drums               prior  to  their sale. Delivery in  drums  was               only  to facilitate their transport  in  small               quantities. The manufacture of the monomer was               complete  when  it was stored in  tanks.  From               these tanks, the goods were, to the extent  of               90%, removed directly and placed in  tankers.-               In 10% of the sales, the "vehicle" of  removal               was  drums. In the premises, the value of  the               drums  irrespective  of  whether  these  where               supplied by the assessee or not, is not inclu-               dible in the assessable value of the goods."     3.  The  learned Attorney General, on  the  other  hand, contended  that  the terms of section  4(4)(d)(i)  are  very clear  and specific. He pointed out though "manufacture"  is the  taxable event, the measure of the levy need not be  and is not to be restricted to the cost of 994 manufacture.  So it is open to Parliament to  prescribe  any measure by reference to which the charge is to be levied and this  is  what  is  done  under  s.  4.  In  construing   S. 4(4)(d)(i), all that has to be seen is whether the goods are delivered in packed condition. If this question is  answered in  the affirmative, then, in respect of the goods so  sold, the cost of packing, whether incurred by the manufacturer or by  the  supplier, has to be automatically included  in  the assessable  value  if  necessary, by addition  to  the  sale price,  except only where the packing is of  durable  nature and  returnable to the manufacturer. He reminded us  of  the oft-quoted  truism that, in tax matters, one has to look  at what  is said and that there is no question of  any  intend- ment,  implication, equity or liberality in  construing  the taxing  provision. I agree with Mukharji, J. that this  con- tention cannot be accepted. The principle referred to by the learned Attorney General is unexceptionable but the words of a  statute  have to be read in the context  and  setting  in which they occur. The proper interpretation to be placed  on the  words of S. 4(4)(d)(i) has been explained in the  judg- ment  of my learned brother and I am in full agreement  with him on this point. There is ample internal indication in the statute to show that the cost of packing referred to in  the above clause is the cost of packing incurred by the manufac- turer  and  recovered by him from the purchaser  whether  as part of the sale price or separately. The object and purpose of  the  levy,  the meaning of  the  expression  ’assessable value’  as interpreted in section before its amendment  cou- pled with the now well established position that the  amend- ment intended to make no change in this position, the use of the word "cost" rather than "value", the nature of the other payments  referred  to in sub clause  (ii)--all  these  show beyond  doubt  that, while generally the  normal  price  for which the goods are sold at the factory gate is to be  taken

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as the assessable value, an addition thereto has to be  made where,  in addition to the price, the manufacturer levies  a charge for the packing which is intrinsically and inevitably incidental to placing the manufactured goods on the  market. It will indeed be anomalous if the cost of an item of  pack- ing charged for from the customer is to be excluded from the assessable  value  where  the packing,  though  durable,  is returnable  to the manufacturer but the cost of an  item  of durable  packing supplied by the customer and taken back  by him  is liable to be included in the assessable value.  This conclusion,  in my opinion, is sufficient to dispose of  the present appeals.     4. In this view of the matter, I consider it unnecessary to discuss wider questions as to the circumstances in  which the cost of packing (primary or secondary) can at all  enter into the determination of the 995 assessable  value  under  S.  4(4)(d)(i)--canvassed  by  the counsel for the assessee--or as to the correctness or other- wise  of  the decision of this Court in Union  of  India  v. Godfrey Phillips, [1985] 3 SCC 369-canvassed by the  learned Attorney  General. My conclusion is that the answer  to  the question whether the cost of the container should be includ- ed in the assessable value or not would depend upon  whether the goods in question are supplied in a packed condition  or not.  If  the answer is yes, three kinds  of  situation  may arise. Where the manufacturer supplies his own container  or drum  but does not charge the customer therefore,  then  the price  of the goods will also include the cost of  the  con- tainer.  There will be no question of separate  addition  to the sale price nor can the assessee claim a deduction of the cost  of packing from the sale price except where  the  con- tainer is a durable one and is returnable to the manufactur- er.  If the manufacturer supplies the drums and charges  the customers   separately   therefore,  then,   under   section 4(4)(d)(i),  the  cost of the drums to the buyer has  to  be added  to the price except where the packing is  of  durable nature and is to be returned to the manufacturer. If on  the other hand, the manufacturer asks the customer to bring  his own  container and does not charge anything  therefore  then the  cost (or value) of the packing cannot  be  "notionally" added  to, or subtracted from, the price at which the  goods have been sold by the manufacturer.     VERMA,  J. I have the benefit of perusing the  judgments prepared separately by my learned Brothers Mukharji, J.  and Ranganathan,  J. both of whom have arrived at the same  con- clusion.  My conclusion also is the same. However, I  append this  short note only to emphasize that in my  opinion  also the  view taken by all of us on the construction of  section 4(4)(d)(i) of the Central Excises and Salt Act, 1944  (here- inafter  referred to as "the Act") is alone  sufficient,  in the  present  matters,  to support the  conclusion  we  have reached  and  it does not appear necessary to  consider  the wider propositions canvassed by the two sides.     I  agree that the cost of packing envisaged  in  section 4(4)(d)(i)  of the Act for determining the "value" in  rela- tion to any excisable goods is only the "cost of such  pack- ing"  incurred  by the manufacturer and recovered  from  the buyer except where the packing is of a durable nature and is returnable  by the buyer to the manufacturer. The  "cost  of such  packing" referred in section 4(4)(d)(i) does  not  in- clude  within its ambit the cost of packing not incurred  by the  manufacturer when the packing is supplied by the  buyer and  not the manufacturer. This construction of the  expres- sion "cost of such packing" in section

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996 4(4)(d)(i) of the Act clearly excludes in these matters  the question of its addition to the price of goods recovered  by the manufacturer from the buyer for determining the  "value" in  relation to the excisable goods for computing  the  duty payable on it.     In my opinion also, the above conclusion reached on  the language  of section 4(4)(d)(i) of the Act is sufficient  to allow these appeals. For this reason, I agree with  Rangana- than,  J. that the wider propositions canvassed by  the  two sides  including  the question of correctness  of  the  view relating  to  secondary packing taken in Union of  India  v. Godfrey Phillips India Ltd., [1985] 3 SCC 369 raised by  the learned Attorney General need not be considered and  decided in these matters.     I agree with my learned Brothers that both these appeals be allowed. R.S.S.                                 Appeals allowed. ?997