Judgment:
1. Appellant is absent in spite of notice but has sent written submissions to be considered by us. We have heard Shri T.R. Malik, SDR and perused the papers.
2. Appellant is engaged in the manufacture of biscuits, part of which is evidently packed in metal containers. Under Notification No. 34/83 biscuits and other specified products are exempt from so much of duty of excise as is equivalent to duty of excise leviable with reference to that part of the value which represents the cost of metal containers in which the goods are packed at the time of their removal from the factory. The appellant therefore paid duty only on the value of biscuits, excluding the value of the metal boxes. Appellant was also enjoying the benefit of exemption Notification No. 175/86, dated 1-3-1986. Under this notification so far as single product is concerned the limit of duty- free clearances was rupees fifteen lakhs. During the period in question, the value of clearances of biscuits was under fifteen lakhs if the value of the metal boxes was excluded and was over rupees fifteen lakhs if the value of metal boxes was included.
Appellant did not pay duty on the clearances in excess of rupees fifteen lakhs value. Notice was issued to the appellant to show cause against demand of duty on the excess. Appellant resisted the notice contending that the value of metal boxes cannot be included for the purpose of Notification No. 175/86 since exemption was in regard to the excise duty equal to the excise duty payable on the value of metal containers. The Assistant Collector as well as the Collector (Appeals) overruled this contention and confirmed the demand. Hence the present appeal.
3. We have seen that the Notification No. 34/83 does not exempt metal containers as such from the scheme of duty but merely exempts so much of the duty of excise as is equivalent to the duty of excise leviable on the specified goods with reference to that part of value which represents the cost of metal containers. The question is what exactly is the relevance of such value in the context of Notification No.175/86.
"For the purposes of this notification, the expression Value' means either the value as determined in accordance with the provisions of Section 4 of the Central Excises and Salt Act, 1944 (1 of 1944) or, as the case may be, according to the tariff values fixed or altered under Section 3 of the said Act." The part of the Explanation referring to Section 4 of the Act is what is relevant in the present case. Thus it is clear that the value of clearance for the purpose of Notification 175/86 is only that value as determined in accordance with Section 4 of the Act.
5. There can be no dispute that the goods sold by the appellants are biscuits packed in metal boxes. Section 4(4)(d) of the Act explains the scope of the expression 'value' for the purpose of Section 4. According to Clause (i) where the goods are delivered at the time of removal in a packed condition, the value includes the cost of such packing except the cost of packing which is of a durable nature and is returnable by the buyer to the assessee. Metal boxes used by the appellant must be of durable nature but the appellant had no case, at any stage, that the boxes were returnable by the buyer to the assessee. By 'returnable' is meant not the possibility of return, but the requirement of return, either under agreement between the parties, express or implied, or according to trade practice. Appellant has not established that metal boxes were returnable. Therefore the value of the excisable goods would include the value of the container also. Hence the value of the metal boxes is to be included. The value of clearances during the year in question exceeded the limit of Rs. 15 lakhs for an individual product thereby depriving the appellant of the benefit of notification in regard to clearances in excess of the limit. We find no ground to interfere and accordingly dismiss the appeal.