JUDGMENT - Bhagwati P. N., Pathak R. S. and Sen A. N. JJ:- We make the following order for reasons which we shall give later :

(A) The position prior to the amendment of section 4 of the Central Excises and Salt Act. 1944 by Act XXII of 1973.

The value of excisable articles for determining the excise duty leviable on it under the Central Excises and Salt Act, 1944 shall 6e taken to be:

(i) the price at which the excisable article is sold by the assessee to a buyer at arm's length in the course of wholesale trade at the time and place of removal;

(ii) Where the excisable article is not sold by the assessee in whole- sale trade, the price at which the excisable article or an article of the like kind and quality is capable of being sold in wholesale trade at the time and place of removal;

(iii) Where the excisable article or an, article of the like kind and quality is not sold in wholesale trade at the place of removal, that is, at the factory gate, but is sold in the wholesale trade at a place outside the factory gate, the price at which the excisable article is sold in the whole-sale trade at such place, after deducting therefrom the cost of transporta-tion of the excisable article from the factory gate to such place; and

(iv) Where the wholesale price of the excisable article or an article of the like kind and quality is not ascertainable, the price at which the excisable article or an article of the like kind and quality is sold or is capable of being sold by the assessee at the time and place of removal or if the excisable article is not sold or is not capable of being sold at such place, then the price at which it is sold or is capable of being sold by the assessee at any other place nearest thereto.

The wholesale cash price at the factory gate is the basis for determina-tion of value of an excisable article and whatever be the wholesale cash price at which the excisable article is sold in wholesale trade at the factory gate, would represent the value of the excisable article on which excise duty is leviable and no deduction from such wholesale cash price is permissible except in respect of trade discount and the amount of excise duty payable at the time of removal of the excisable article from the factory or any other premises of manufacture of production. No amount is deductible from such price in respect of advertisement or publicity expenses incurred by the assessee or expenses in connection with the storage of excisable article or expenses of the sales organisation or any other expenses incurred by the assessee upto the date of delivery.

Where sale in the course of wholesale trade is effected by the assessee through its sales organisation at a place or places outside the factory gate, the price at which the excisable article is sold at such place or places is to be taken as the value of the excisable article after deducting only the cost of transportation of the excisable article from the factory gate to the place or places where it is sold, but without any deduction in respect of advertisement or publicity expenses, cost of storage of the excisable article at the factory premises and at the place or places where it is sold as also the expenses of the sales organisation and any other expenses incurred by the assessee upto the date of delivery.

So far as the cost of packing is concerned, no deduction is permissible in respect of such cost from the wholesale cash price of the excisable article at the factory gate, whether the packing be primary packing or secondary packing and whether its cost is shown separately or as, included in the wholesale cash price. Whatever packing is necessary for the purpose of putting the excisable article in a condition in which it is generally sold in the wholesale market at the factory gate, the cost of such packing cannot be deducted from the wholesale cash price of the excisable article at the factory gate. If however, any special secondary packing is provided by the assessee at the instance

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