G. Sankaran, Member (T)

1. The captioned appeal was initially filed as a revision application before the Central Government which, under the provisions of Section 35-P of the Central Excises and Salt Act, 1944, has come as transferred proceedings to this Tribunal for disposal as if it were an appeal filed before it.

2. The appellants manufacture synthetic detergents marketed under the brand name 'Surf' and soap. For the purpose of packing these products, they used to bring from outside their factory printed cartons on which duty leviable under Item No. 68 of the Central Excise Tariff Schedule (GET) had been paid. The appellants contended before the Assistant Collector that the finished products, namely, synthetic detergent and soap were eligible for partial exemption from the excise duty leviable thereon to the extent of the duty paid on the printed cartons used in their packing. This claim was made in terms of Central Excise Notification No. 201/79 dated 4-6-1979. The appellants also put forth an alternative contention that, in the event of the aforesaid contention not being accepted, it should be held that the cost of the printed cartons and packing of the finished products into the cartons were in the nature of post-manufacturing expenses and, therefore, were deductible from the assessable value of the finished product. Both these contentions were rejected by the Assistant Collector as well as the Appellate Collector. In short, it was held by the Appellate Collector that packing of manufactured goods for their safety and protection or transportation was not a process incidental or ancillary to the completion of the manufactured goods. Neither in Section 2(f) of the Central Excises and Salt Act, nor in the relevant tariff entries, packaging was included as a process of manufacture in the case of these goods. It could not be said that the printed cartons were used in the manufacture of the finished products. As regards the alternative contention. it was held that in accordance with Section 4(4) (d) of the Central Excises and Salt Act, only the cost of packing of a durable nature, returnable by the buyer to the assessee, was eligible for deduction and printed cartons not being durable or returnable, their cost was not, deductible from the assessable value. It is against the Appellate Collector's order dated 20-6-1981 that the appellants are presently before us.

3. Shri M.S. Gupta, Senior Legal Manager of the appellant company, urged before us in the course of the hearing that Central Excise Notification No. 201/79 did not define "inputs". The term was used only to designate or refer to any goods falling under Item No. 68 of the First Schedule to the Central Excises and Salt Act which had been used in the manufacture of other excisable goods on which duty of excise was leviable. The term "inputs" was not used here in the sense of ingredient. That this was so, was abundantly clear from the fact that this notification was amended by Notification No. 105/82, dated 28-2-1982 which substituted the phrase-

"and in the manufacture of which any goods falling under Item No. 68 of the First Schedule to the Central Excises and Salt Act, 1944 (hereinafter referred to as 'the inputs')", by the phrase-

"and in the manufacture of which any goods falling under Item No. 68 of the First Schedule to the Central Excises and Salt Act, 1944, have been used as raw materials or component parts (hereinafter referred to as 'the inputs')".

4. Shri Gupta thereafter proceeded to cite certain judicial pronouncements in support of his contention. He relied upon the Supreme Court decision in Union of India and Ors. v. Bombay Tyre International Ltd. etc. 1983 E.L.T. 1896 (S.C.), and submitted that primary packing was held to be a part of the manufacturing process though the packing itself might not be an ingredient of the manufactured goods. Then he referred to the Rajasthan High Court decision in Ramnagar Cane and Sugar Co. Ltd, Jaipur and Ors. v. Union of Ind