Shukla & Co., Kanpur Vs. Collector of Central Excise, Kanpur  INSC 918 (9 December 1997)
SEN, M. SRINIVASAN
appeals are directed against the order of the Customs Excise & Gold Control
Appellate Tribunal, New
Nos. 3030-31 of 1989 are by the assessee while the other appeals are by the
Revenue. Two questions arise for consideration. One of them has already been
concluded by the judgment of this Court Government of India and others Versus
Madras Rubber Factory and others (1995) 4 S.C.C. 349.
that case it has been held that for the purpose of levying duty under the
provisions of the Act the value of the packing materials should also be
included to arrive at the assessable value of the excisable goods. The Tribunal
has directed the exclusion of the value of packing materials and thus the
Revenue is aggrieved. In view of the aforesaid judgment of this Court, the
appeals of the Revenue are hereby allowed to that extent.
other question which arises for consideration relates to the mathod of arriving
at the value of chewing tobacco per kilogram under Notification No. 35/79 C.E.
dated 1.3.1979 as amended by Notification No.151/79 C.E. dated 30.3.1979. The
Notification in so for as it is relevant reads as follows:
to chewing tobacco.- In excise of the powers conferred by sub-rule (1) of Rule
8 of the Central Excise Rules 1944, read with sub-section (3) of Section 3 of
the Additional Duties of Excise (Goods of Special Importance) Act, 1958 (58 of
1957), the Central Government hereby exempts chewing tobacco of the descreption
specified in colum (1) of the Table hereto annexed and falling under sub-item
11 (5) of Item No.4 of the First Schedule to the Central Excise and Salt Act
1944 (1 of 1944) from so much of the duty of excise leviable thereon both under
the Central Excise and Salt Act, 1944 (1 of 1944) and the Additional Duties of
Excise (Goods of Special Importance) Act 1957 (58 of 1957) as is in excess of
the duty specified in corresponding entry in column (2) thereof.
TABLE ------------------------------------------------------------ Description
Rate of duty ------------------------------------------------------------
Chewing tobacco of which the value per one kilogram - (i) does not exceed
rupees ten (ii) exceeds rupees ten fifteen per cent and valorem Twenty five percent ad valorem
contention of the assessee s that for arriving at the value per kilogram of
chewing tobacco the total value of the entire package should be divided by the
total weight of the package. The contention of the Revenue is that the value of
the tobacco has to be arrived at by dividing the value of the total package
divided by the net weight of the tobacco after excluding the weight of the
packing materials from the weight of the total package. It is argued by the
Revenue that the Notification uses the expression " chewing tobacco"
and speaks of value per one kilogram.
to learned counsel it would mean tobacco before its being packed and the weight
There is no merit in this contention. When for the purpose of assessing the
value and levying the duty, the total value of the package is taken as
assessable value of the goods under Section 4 of the Act, the same method shall
be applied for assessing the value of the goods for the purpose of exemption.
We accept the contention of the assessees in this regard and hold that for the
purpose of exemption notification the value of the chewing tobacco per kilogram
shall be arrived at by dividing the total value of the package in its entirety
by the total weight of the package.
view expressed by the Tribunal to the contrary is erroneous and therefore the
order of the Tribunal is set aside to that extent. The appeals are disposed
accordingly. The Assistant Collector shall pass appropriate orders in
accordance with the above decision.