S.V. Maruthi, Member (J)

1. These two appeals are disposed of by a common order as the appeals arose out of a common order of the Collector (Appeals).

2. The dispute relates to the allowability of certain deductions claimed by the appellants.

3. The appellants M/s Tungbhadra Industries Ltd. entered into an agreement with M/s. Indexport Ltd., a wholly owned subsidiary of Hindustan Lever Ltd., Bombay for manufacture on its behalf two brands of Soaps, namely Sunlight and Lifebuoy. Indexport issued an authorisation under Notification No. 305/77 dtd. 5-11-1977. All the materials required for manufacture of the said soaps were supplied to the appellants by Indexport and the appellants received processing charges for conversion of raw materials into finished goods at a specified rate per unit of production. In terms of the agreement entered into between the appellant and Indexport, the price at which the goods will be sold by Indexport is the basis for the determination of the assessable value for the levy of excise duty.

4. The appellants filed price lists claiming the following deductions :

1. Turnover tax;

2. Cost of special secondary packing;

3. Freight incurred in movement of finished