H.N.Seth, J. - (1.) In the year 1960 the petitioner State of U.P. took on lease a glass-factory that was till then being run by M/s. Vibhuti Glass Works Ltd., a company incorporated under the Indian Companies Act. It manufactured glass bottles and supplied them of its customers after packing them in straw and gunny bags. It had o under the Central Excises and Salt Act, pay excise duty calculated on the basis of the value of the bottles manufactured by it. They petitioner claims that it calculated the value of the bottles manufactured by it by including the cost of packing charges as well and paid the excise duty calculated On 10th September, 1971 a Division Bench of Mysore High Court, in the case of M/s. Alembic Glass Industries Ltd. V. Union of India-Writ Petition Nos. 548 and 3436 of 1970 held that while determining, for purposes of computation of excise duty, the value of the articles manufactured by Messrs Alembic Glass Industries Ltd. The Excise Authorities were not justified in including the value of packing charges in the assessable value of the Glass articles manufactured by the company. The State of U.P then realized that it had been made to over pay the excise duty on the glass bottles manufactured by it by including the packing charges therefore in their assessable value, in circumstances similar to that in which M/s. Alembic Glass Industries Ltd. Had been, in the case before the Mysore High Court, made to pay the same. Accordingly, on 27th March, 1973 it moved an application before the Collector, Central Excise, Varanasi praying that for purposes of levying excise duty on glass bottles manufactured by it, the price list submitted by it should be approved without including the packing charges therein and that the excise duty payable thereon should be calculated accordingly. It further prayed that the excess excise duty already paid on the amount of packing charges be refunded to it.
(2.) The Assistant Collector vide his order dated 5th July, 1973 rejected the aforesaid request made by the petitioner. He held that it was necessary for the petitioner to pack the bottles manufactured by the before delivering the to it customers. Such packing being a process incidental to the completion of the manufactured articles, its cost had to be included in the assessable value to be determind under Section 4 of the Central Excises and Salt Act, 1944, moreover, the decision of the Mysore High Court was not binding upon the Government of India in relation to cases arising out-side the jurisdiction of that court. He, therefore, did not find any justification for exempting the duty referable to packing charges which went to constitute the assessable value of the articles manufactured by the petitioner.
(3.) Being aggrieved the petitioner went up on appeal before the Appellate Collector, who observed that at the time of hearing of the appeal, the petitioner admitted that no consignment of the goods manufactured by them was cleared without packing that goods when presented at the factory gate at the time of their clearance for assessment were packed in straw and gunny bags. It admitted that the value of packing charges was being realized from the customers. The whole sale price of the goods manufactured by the petitioner depended upon the manner in which the article was delivered in the normal course off business that is with or without packing. As in the instant case, it was admitted that all goods manufactured by that petitioner were cleared from the factory in packed condition, the cost of packing had to be included in the assessable value, In the result the Appellate Collector, vide his order dated 31st December, 1974 dismissed the appeal and upheld the order made by the Assistant Collector.;