Judgment

SABYASACHI MUKHARJ1, J.:- This is an appeal under S. 351-(b) of the Central Excises and Salt Act, 1944 (hereinafter called the Act) from the judgment and order of the Customs, Excise and Gold (Control) Appellate Tribunal, New Delhi, (hereinafter called the Tribunal) dated 28th November 1988.

2. M/ s. Ponds India Ltd., (hereinafter referred to as the respondent) used to manufacture telcum powder and face powder falling under tariff item 14F.of the Central Excise Tariff, which. are now under sub-heading No. 3304.00 and were clearing the same on payment of duty. The assessee claimed deduction of cost of packing for transportation in respect of small packings of 15, 18,20,30,40 and 100 gms. powder ranging from 0.27 paise to 0.76 paise per dozen packings and the same was approved provisionally by the office of the Asstt. Collector of Central Excise, Pondicherry. The said approval was by an order dated 10th December,1985. It is alleged that it was later noticed that the small packs were first packed in dozen and then packed in secondary packings for easy transportation to the wholesale dealer, and it was found that the secondary packings were a must for delivery to the wholesale dealers (emphasis indicated). The Asstt. Collector came to the conclusion that the amount as claimed by the respondent was not deductible as per this Courts decisions in respect of post-manufacturing expenses. In the premises, a show cause notice was issued to the respondent on October 30, 1986 and a demand was made for the differential duty on the cost of secondary packings which was stated to be Rs. 3,46,15 1.92 for the period from December 2, 1985 to May 31, 1986. The Asstt. Collector by his order dated February 27, 1987 disallowed the respondents claim for exclusion of the cost of packing for transportation and thus rejected its claim. He, inter alia, observed as follows :

"Therefore, I consider that the cost of secondary packings viz., card board cartons are rightly includible in the assessable value of items mentioned in PI No. 405/85-86 and 4061 8-5-86 dated 10- 12-85 under S. 4(4)(d)(i) of the Central Excises and Salt Act, 1944, and the provisional assessments are to be finalised accordingly. The assessees are also liable for payment of differential duty of Rupees 3,46,151.92 as demanded in the show cause notice cited under S. 11 A of the Central Excises and Salt Act read with Rule 9 B of the Central Excise Rules, 1944."

3. There was an appeal to the Collector of Customs which was disposed of by an order dated 15th September, 1987. It is necessary to set out the said observations of the Collector., in view of the contentions sought to be raised in these matters. He, inter alia, observed as follows :

"I have carefully considered the submission of the appellants made in their grounds of appeal and repeated during personal hearing. I find that the appellants claim is solely based on the judgment of the Honble SC in the case of Godfrey Philips and which has been followed by different High Courts also from time to time. First of all. it is necessary, to consider whether the goods sold by the appellants viz. talcum powder and face powder required an outer carton packing for purpose of. safety in transit, which was the case before the Honble SC in case of M/s. Godfrey Philips. It cannot be disputed that talcum powder and face powder are packed either in metal containers or in plastic packing also of cardboard packings, which are inner cartons and contain one dozen. The same are then put in the master carton for purpose of delivery to wholesale dealers. In the Honble SCs judgment, it is stated that the corrugated fibre board containers are employed only for purpose of avoiding damage or injury during transit. But that is not as in the case of the appellants. There is no likelihood of any damage or injury to the tins or the plastic containers employed as a primary packing even if the goods are transported without the outer packing. Unlike cigarettes, even