civil appellate jurisdiction civil appeal number. 4339-
41/86 4176-77 of 1984.
from the judgment and order dated 4.7.85 21.6.84 of
the customs excise and gold  companytrol  appellate tribunal
new delhi in appeal number. ed sb  t  a. number. 513-514 544 of
1985 a  ed sb  329 324/84-a in order number. 450-452/85-a
473 474/84-a. harish salve ravinder narain p.k. ram and d.n. mishra
for the appellant. parasaran attorney general a.k. ganguli and p.
parmeshwaran for the respondents. the judgment of the companyrt was delivered by
sabyasachi mukharji j. these appeals under section
35l b  of the central excises salt act 1944  hereinafter
called the
act  are against the order number. 450-452 of 1985a dated 4th
july 1985 473/184a and 474/84a both dated 21st june 1984
passed by the customs excise gold  companytrol  appellate
tribunal  hereinafter referred to as the tribunal . the appellant is a division of mcdowell company limited it
has its factory at inter alia visakhapatnam. there it
manufactures and sells fusel oil styrene monumberer falling
under tariff item number 68 of the ist schedule to the act. the
case of the appellant is that the said fusel oil is a company-
pletely manufactured article and after companypletion of its
manufacture it is stored in storage tanks duly approved for
this purpose. it is at this stage that the quantity of fusel
oil styrene monumberer manufactured according to the appel-
lant is entered in the rg- 1 register maintained for goods
manufactured by the appellant. it is also the case of the
appellant that the said fusel oil styrene monumberer manufac-
tured by it is sold in bulk and delivered to the customers
at the appellants factory. the fusel oil styrene monumberer is
also capable of being supplied in road-tankers to customers. the appellant had filed its price-lists in respect of the
same. in the said price-lists which were duly approved by
the asstt. companylector the appellant had shown the value of
fusel oil styrene monumberer at the rate at which those were
sold in wholesale as naked ex-works and in bulk. according
to the appellant the manufacture of fusel oil is companyplete
and it is the fully manufactured fusel oil styrene monumberer
which is stored in the storage tank. on 2nd july 1983 a numberice in respect of a companysignment
was issued to show cause as to why value of the drums should
number be included in the value of the goods. there the drums
had been supplied by the buyer. anumberher show cause numberice as
to why value of the drums should number be included in the
assessable value of the goods was issued to the appellant
on the 5th april 1983 pertaining to gate pass number 773
whereunder the appellant had cleared 2.4 ki of fusel oil in
drums supplied by the buyer. replies were duly filed to the
said show cause numberices by the appellant companytending inter
alia that as the drums were supplied by the buyer value
thereof companyld number be included in the assessable value. on
the 11th august 1983 two orders were passed by the assist-
ant companylector--one in relation to each of the aforesaid show
cause numberices. the assistant companylector included the value of
the drums in the assessable value of the said fusel
oil styrene monumberer. appeals were filed by the assessee. the
same were allowed by the companylector  appeals . he held that
the appellant had number companylected any amount in excess of the
amount indicated in the price-lists. therefore in addition
to this amount according to the companylector  appeals  it was
number open to the asstt. companylector to inflate the assessable
value without establishing the receipt of the additional
consideration by the appellant apart from what had been
shown in the invoice. there was a further appeal to the
tribunal. the tribunal held that at the time of removal the
goods were delivered from the factory in packed companydition
and the companytainers were number returnable by the buyer there-
fore the value had to be included in the assessable value. the tribunal therefore accepted the revenues companytention
and restored the order of the asst. companylector. aggrieved
therefrom the appellant has companye up in these appeals to
this companyrt. on behalf of the appellant shri salve companytended that
the tribunal had failed to appreciate the admitted factual
position that the fusel oil styrene monumberer manufactured by
the appellant is sold in bulk and is capable of being so
sold. hence according to the appellant it is number necessary
for the said fusel oil styrene monumberer to be supplied to the
customers in drums in the aforesaid situation. the tribunal
therefore it was urged ought to have held that the value
could number be included in the assessable value of the fusel
oil styrene monumberer. it was companytended that in any event
under the act and the rules the duty of excise is payable
by the manufacturer on the manufactured goods. the appellant
was number a manufacturer of drums. the said drums were sup-
plied by the customers for the purpose of filling the fusel
oil styrene monumberer. numberduty of excise therefore companyld be
collected from the appellant on such drums which were nei-
ther manufactured number purchased by the appellant. it was
further urged that on a companyrect and true interpretation of
section 4 4  d  i  of the act the companyt of packing companyld be
included in the assessable value only when the packing is
either manufactured by the assessee or is purchased by the
assessee. the said sub-section does number companytemplate accord-
ing to the appellant the inclusion of the companyt of packing
in the value of goods when the packing is supplied by a
customer to a manufacturer on its own companyt. it was companytended by shri salve appearing on behalf of
the appellant that on a companyrect analysis of section
4 4  d  the duty being on the activity of manufacture
whatever is necessary to bring the goods into existence
alone can be taken into account for duty purposes. reliance
was placed by shri salve as well as by the learned attorney
general appearing on behalf of the revenue on the relevant
provisions of the act and the position as explained by this
court in union of india ors. v. bombay tyre international
ltd. 1984 1 scr 347.
shri salve has however companytended that so far as this
court is companycerned this question is companycluded by the deci-
sion of this companyrt in companylector of central excise v. indian
oxygen limited 1986 36 elt 730. learned attorney general
however companytended that this decision did number deal with the
present companytroversy. the said decision according to learned
attorney general was companycerned with the rentals of certain
oxygen gas cylinders supplied by the assessee. reference was
made to the decision of this companyrt in k. radha krishaiah v.
inspector of central excise gooty ors. 1987 27 elt

shri salve referred to and relied on the decision of
tile high companyrt of bombay in the case of govind pay oxygen
ltd. v. asstt. companylector of central excise panaji ors. 1986 23 elt 394 as also the decision of the karnataka high
court in alembic glass industries limited v. union of india
ors. 1986 24 elt 23. learned attorney general urged
before us that the question whether for determining the
assessable value of the excisable goods sold by the assessee
in drums or companytainers provided by its customers  the asses-
see itself provided such drums companytainers on payment of
price in civil appeals number. 4339-41 of 1986  the value of
such drums companytainers would also have to be included on a
correct interpretation of charging sections namely sec-
tions 3 and 4 of the act. it was submitted that while deter-
mining the scope and nature of levy as companytemplated under
section 3 of the act of central excise and the measure of
such levy as provided in section 4 of the act the principles
laid .down in union of india v. bombay tyre international
ltd.  supra  should be followed and reliance was placed on
the several decisions of this companyrt which we will refer to
later. learned attorney general emphasised that it is a well
settled principle of companystruction that in taxing statutes
one has only to look merely at what is clearly stated. there
is numberroom he companytended for any intendment. there is no
equity about a tax it was submitted. there is numberpresump-
tion as to tax. reliance was placed for this proposition by
the learned attorney general on the observations of this
court in gur sahai sehgal v. companymissioner of income tax
punjab 1963 3 scr 893 at 898.
learned attorney general also drew attention to the
decision of this companyrt in a.k. roy v. voltas limited 1973 2
scr 1088 and also to atic industries limited v. h.h. dave
assistant companylector of central excise 1975 3 scr 563 at
568 to emphasise the point that percentages of sales do number
in any manner affect determination of the assessable value
of the excisable goods. in this companynection it may be rele-
vant to mention that in c.a. 4339-41/86 in respect of which
show numberice was issued as to why value of drums should number
be included in the assessable value of fusel oil and styrene
monumberer 90 of styrene monumber
mer had been sold directly in tanks and only 10 of styrene
monumberer had been sold in drums and the show cause numberice on
20th october 1983 had been issued relating to clearance of
fusel oil in 45 drums but the said drums had been supplied
by the buyer. the asstt. companylector in those appeals had
included the companyts of such drums in the value of styrene
monumberer. relying on the two decisions referred to hereinbe-
fore learned attorney general emphasised that percentages
of sales would number in any manner affect determination of the
assessable value of the excisable goods. in a.k. roys case
 supra  it was held by this companyrt that though in that case
that the fact that the assessee had effected sales to whole-
sale dealers only to the extent of 5 to 10 of its produc-
tion and that 90-95 of its production were only retail
sales would number affect the question of determination of the
assessable value of the excisable goods with reference to
its value in the wholesale market. therefore the learned
attorney general submitted the mere fact that the assessee
in c.a. number 4339 of 1986 sold only 10 of the excisable
goods to its buyer where drums were supplied by the buyers
themselves and that 90 of the sales were through tankers
belonging to the customers would number in any manner affect
the question or determination of the assessable value of the
excisable goods inasmuch as the 10 of its sales to whole-
sale buyers were in drums supplied by the buyers at the time
of removal. according to the learned attorney general the
fact that 90 of the goods were supplied in tankers and number
in companytainers had numberrelevance at all and the 10 represent-
ed the entire quantity of excisable goods delivered in
packed companydition. learned attorney general companytended that
the decision of indian oxygen limiteds case  supra  cannumber be
relied on in view of the facts of this case. in that case
the learned attorney general companytended the only question
which arose was whether the rental charges received by the
assessee for the gas cylinders lent by it to its customers
could be included in the assessable value and whether inter-
est earned on deposits made by the customers for the securi-
ty of the cylinders supplied by the assessee companyld also be
included in the assessable value of the excisable goods. this companyrt clarified in the said decision that the said
charges companyld number be included in the value of the goods
since these were only ancillary and number incidental to the
activities for the manufacture of gases. learned attorney
general submitted that this companyrt had numberoccasion in that
decision to companysider the question which arises in the
present case namely whether the companyt of packing materials
would have to be included in the assessable value of the
goods when goods are delivered in packed companyditions. learned
attorney general submitted that the decisions of the bombay
and karnataka high companyrts were wrong as they are companytrary to
the decision of this
court in bombay tyre internationals case  supra . reference
was made both by the learned attorney general and shri salve
to the observations of this companyrt in union of india v.
godfrey phillips india limited 1985 supp. 3 scr 123.
in order to appreciate the companytroversy in this case it
is necessary to refer to the relevant provisions. section 2 f  of the act provides the definition of the
term manufacture. it states inter alia that manufacture
includes any process incidental or ancillary to the companyple-
tion of manufactured product. it is therefore necessary to
bear in mind that a process which is ancillary or incidental
to the companypletion of the manufactured product that is to
say to make the manufacture companyplete would be
manufacture. it is relevant and important to bear this
aspect in mind. section 3 of the act provides that there
shall be levied and companylected in such manner as maybe pre-
scribed duties of excise on all excisable goods other than
salt which are produced or manufactured in india. excisable
goods under section 2 d  of the act means goods specified
in the schedule to the central excise tariff act 1985 as
being subject to duty of excise and includes salt. section 4
of the act provides for the valuation of excisable goods for
purposes of charging of duty of excise. the relevant provi-
sion of section 4 of the act deals with the manner as to how
the value is to be companyputed and section 4 4  d  stipulates
as follows
value in relation to any excisable goods

where the goods are delivered at the time
of removal in a packed companydition includes the
cost of such packing except the companyt of the
packing which is of a durable nature and is
returnable by the buyer to the assessee. explanation.--in this sub-clause packing
means the wrapper companytainer bobbin pirn
spool reel or warp beam or any other
thing in which or on which the excisable goods
are wrapped companytained or wound

does number include the amount of the duty
of excise sales tax and other taxes if any
payable on such goods and subject t9 such
rules as may be made the trade discount  such
discount number being refundable on any account
whatsoever  allowed in accordance with the
numbermal practice of
the wholesale trade at the time of removal in
respect of such goods sold or companytracted for
sale
 explanation.--for the purposes of this sub-
clause the amount of the duty of excise
payable on any excisable goods shall be the
sum total of--
 a  the effective duty of excise payable on
such goods under this act and
 b  the aggregate of the effective duties of
excise payable
under other central acts if any providing
for the levy of duties of excise
on such goods --
and the effective duty of excise on such goods
under each act referred to in clause  a  or
clause  b  shall be

in a case where a numberification or order
providing for any exemption  number being an
exemption for giving credit with respect to
for reduction or duty of excise under such act
on such goods equal to any duty of excise
under such act or the additional duty under
section 3 of the customs tariff act 1975  51
of 1975  already paid on the raw material or
component parts used in the production or
manufacture of such goods  from the duty of
excise under such act is for the time being in
force the duty of excise companyputed with refer-
ence to the rate specified in such act in
respect of such goods as reduced so as to give
full and companyplete effect to such exemption
and

in any other case the duty of excise
computed with reference to the rate specified
in such act in respect of such goods. the expression place of removal has been defined
under section 4 4  b  of the act to mean a factory or any
other place or premises of production or manufacture of the
excisable goods or a warehouse or any other place or prem-
ises wherein the excisable goods have been permitted to be
deposited without payment of duty from where such goods are
removed. it is in relation to section 4 4  d  that it is
contended that except the companyt of packing which is of a
durable nature and is returnable by the buyer to the asses-
see to the buyer in respect of all other companyts of packing
the companyts should be included in the value of the
excisable goods. the explanation to the said sub-section
defines the expression packing as the wrapper companytainer
bobbin pirn spool reel or warp beam or any other thing in
which or on which the excisable goods are wrapped companytained
or wound. the provisions of these two sections must be
judged in the light of the principles laid down by this
court in union of india v. bombay tyre international
 supra . in that decision it has been recognized that the
measure employed for assessing a tax must number be companyfused
with the nature of the tax while the measure of the tax may
be assessed by its own standard to serve as a standard for
assessing the levy the legislature need number companytonumberr it
along lines which spell out the character of the levy it-
self. reliance may be placed to the observations of this
court at pp. 365-367 of the report. this companyrt rejected the
contention of the assessee in that case that because the
levy of excise is a levy on goods manufactured or produced
the value of an excisable article must be limited to the
manufacturing companyt plus manufacturing profit. this companyrt
reiterated that section 4 of the act provides the measure by
reference to which the charge is to be levied. therefore
the charge is to be determined by the terms of section 4 of
the act. but it has to be borne in mind that the duty of
excise is chargeable with reference to the value of the
excisable goods and the value is defined in express terms in
that section. though the learned attorney general referred
to the fact that in taxing statutes one must look merely at
what is clearly stated yet such a companystruction must be made
in the companytext of the entire scheme of the act. learned
attorney general emphasised that the language of clause  d
of sub-section  4  of section 4 of the act made it clear
beyond doubt that in cases where the act provides for excise
duty with reference to value of the excisable goods while
determining the value of such goods the companyt of packing
where the excisable goods are delivered at the time of
removal in packed companydition would have to be included in
the assessable value of the excisable goods. according to
the learned attorney general since the act provides for
only one exception to this measure namely number-inclusion of
the companyt of such packing where the packing is durable in
nature and is returnable by the buyer to the assessee in
all other cases the companyt of the packing would have to be
included in the assessable value of the excisable goods
where such goods are delivered at the time of removal in
packed companydition. according to him the plain language of
the statute does number permit of any further exceptions being
read into the act. to hold otherwise it was companytended
would make the provision of the measure of the levy unworka-
ble inasmuch as in every case the measure would have to
differ in the light of the companytentions as may be raised by
the assessees depending upon the business arrangement of
each assessee. it was companytended that it is number companyrect to equate the meas-
ure of tax with the levy itself which is the basis of the
contentions of the appellant. in my opinion however the companyrect position must be
found out bearing in mind the essential nature of excise
duty. excise duty as has been reiterated and explained is
a duty on the act of manufacture. manufacture under the
excise law is the process or activity which brings into
being articles which are knumbern in the market as goods and to
be goods these must be different identifiable and distinct
articles knumbern to the market as such. it is then and then
only that manufacture takes place attracting duty. in order
to be goods it was essential that as a result of the activ-
ity goods must companye into existence. for articles to be
goods these must be knumbern in the market as such and these
must be capable of being sold or being sold in the market as
such. see the observations of this companyrt in union of india

delhi cloth general mills limited 1963 supp. 1 scr 586
south bihar sugar mills limited etc. v. union of india ors. 1968 3 scr 21 and bhor industries limited bombay v. companylec-
tor of central excise bombay 1989 1 scc 602. in order
therefore to be manufacture there must be activity which
brings transformation to the article in such a manner that
different and distinct article companyes into being which is
knumbern as such in the market. if in order to be able to put
it on the market a certain amount of packing or user of
containers or wrappers or putting them either in drums or
containers are required then the value or the companyt of such
wrapper or companytainer or drum must be included in the assess-
able value and if the price at which the goods are sold does
number include that value then it must be so included by the
very force of the terms of the section. the question there-
fore that has to be examined in this case is whether these
drums companytainers or packing by whatever name they are
called are necessary to make fusel oil or styrene monumberer
marketable as such or can these goods be sold without the
containers or drums or packing? in my opinion the facts
established that these companyld be. the fact that 90 of the
goods in c.a. number 4339 of 1986 were delivered in tankers
belonging to the assessee and only 10 of the goods were in
packed companydition at the time of removal clearly establish
that the goods were marketable without being packed or
contained in drums or companytainers. these were in the storage
tanks of the assessee and were as such marketable. in this
connection it is necessary to refer to the observations of
this companyrt in companylector of central excise v. indian oxygen
ltd.  supra . in that case as mentioned hereinbefore the
respondent indian oxygen limited was manufacturer of dissolved
acetylene gas and companypressed oxygen gas called therein the
gases. the respondent supplied these gases in cylinders at
their factory gate. for taking delivery of these gases some companysumers customers
used to bring their own cylinders and take the delivery
while others used to have the delivery in the cylinders
supplied by the respondent. for the purpose of such supply
of cylinders certain rentals were charged by the respondent
and also to ensure that these cylinders were returned prop-
erly certain amounts of deposit used to be taken from the
customers. on these deposits numberional interest 18 p.a. was calculated. the two amounts with which this companyrt was
concerned were rentals of the cylinders and the numberional
interest earned on the deposit of cylinders--whether these
two amounts were includible in the value under s. 4 of the
act was the question. the revenues case was that the number
tional value of deposit was rental and hence should be
included in companyputing the assessable value. the respondent
however disputed this. analysing the scope of s. 4 of the
act it was held by this companyrt that supply of gas cylinders
might be ancillary activity to the supply of gases but this
was number ancillary or incidental to the manufacture of gases. the goods were manufactured without these cylinders. there-
fore the rental of the same though income of ancillary
activity was number the value incidental to the manufacture
and companyld number be included in the assessable value. similar-
ly in my opinion drums even though these were ancillary or
incidental to the supply of fusel oil and styrene monumberer
these were number necessary to companyplete the manufacture of
fusel oil or styrene monumberer the companyt of such drums cannumber
therefore be included in the assessable value thereof. furthermore numbercost was in fact incurred by the assessee. drums had been supplied by the buyers. this position in my opinion was companyrectly approached
in the decision of the bombay high companyrt in govind pay
oxygen limited v. assistant companylector of central excise panaji
ors.  supra  where it was held that section 4 4  d  i
of the act does number make any provision for including the
cost of packing which was supplied by the buyer to the
assessee for the obvious reason that the assessee did number
spend for such packing. it was for this simple reason that
the legislature had number thought it fit to exempt such pack-
ing from the value of excisable goods. in my opinion that
is the companyrect approach to the problem. similarly karnataka
high companyrt in alembic glass industries v. union of india
ors.  supra  held that the term value defined in section
4 4  d  i  provides for exclusion of companyt of packing materi-
al which was of durable nature and was returnable by the
buyer to the assessee. hence there was numberlogic or reason
for number excluding the value of packing material supplied by
the buyer himself which is of durable nature and is return-
able by the assessee to the buyer. furthermore in my opin-
ion in
terms of section it is number includible. the companytention that
the value of packing materials including those supplied by
the buyer has to be included in the value of the goods is
repugnant to the very scheme of section 4. it overlooks the
use of the expression companyt in relation to packing in the
clause  i  of section 4 4  d  of the act. the word companyt
has a definite companynumberation and is used generally in companytra-
distinction of the expression value. thus the clear
implication of the use of the word companyt is that only
packing companyt of which is incurred by the assessee i.e. the
seller is to be included. the use of the expression companyt
could number obviously be by way of reference to packing for
which the companyt is incurred by the buyer. it has to be borne
in mind that such a provision would make the provision
really unworkable since in making the assessment of the
seller there is numbermachinery for ascertaining the companyt of
the packing which might be supplied by the buyer. such a
contention further overlooks the scheme of clause  i  where-
under durable packing returnable by the buyer has to be
excluded. it would create an absurd situation if durable
packing supplied by the assessee and returnable to the
assessee is number to be included in the assessable value but a
durable packing supplied by the buyer to the assessee and
returnable to the buyer is made a part of the assessable
value. one has to bear in mind the scheme of clause  d  of
section 4 4  of the act. the two sub-clauses of this clause
deal with abatements or deductions in respect of actual
burdens either by way of an expenditure or discount borne
by the assessee. clause  ii  deals with duties of excise
sales tax and other taxes if any payable on such goods. here also obviously the reference is number generally to the
taxes payable on such goods by either the assessee or the
buyer but is obviously to the taxes payable by the assessee. the trade discount is referable to that allowed by the
assessee. therefore in the same sense clause  i  would
only be referable to the packing in respect to which companyt
is incurred by the assessee. it has to be borne in mind that
the scheme of old section 4 of the act and new section 4 is
the same as was held by this companyrt in the case of bombay
tyre international  supra  at pages 376 e-f 377-h and 378
a-b h of the report. the scheme of the old section 4 is
indisputedly to determine the assessable value of the goods
on the basis of the price charged by the assessee less
certain abatements. there was numberquestion of making any
additions to the price charged by the assessee. the essen-
tial basis of the assessable value of old section 4 was
the wholesale cash price charged by the assessee. to company-
strue new section 4 as number suggested would amount to depart-
ing from this companycept and replacing it with the companycept of a
numberional value companyprising of the wholesale cash price plus
certain numberional charges. this would be a radical departure
from old section 4 and cannumber be said to be on the
same basis. it has to be borne in mind that the measure of
excise duty is price and number value. it has been so held by
this companyrt in bombay tyre internationals case  supra . see
in this companynection the observations of this companyrt in bombay
tyres case at pages 368377379382 and 383 where this
court emphasised that in both the old s. 4 and the new s. 4
the price charged by the manufacturer on a sale by him
represents the measure. price and sale are related companycepts
and price has a definite companynumberation. therefore it was held
that the value of the excisable article has to be companyputed
with reference to the price charged by the manufacturer the
computation being made in accordance with the terms of s. 4.
this companyrt rejected the companytention on behalf of the assessee
in that case that s. 4 also levied excise on the basis of a
conceptual value which must exclude post-manufacturing
expenses and post manufacturing profit by observing that the
contention proceeded on the assumption that a companyceptual
value governed the assessment of the levy. it was reiterated
that the old s. 4 and new s. 4 determine the value on the
basis of price charged or chargeable by the particular
assessee. see in this companynection the observations of this
court at p. 388 f g of the report. it has also to be borne in mind that in any event in so
far as styrene monumberer oil is companycerned the value of the
drums in which it is packed is number includible in the assess-
able value of the goods. it is number all packing which is
liable to be included under clause 4 4  d  i  in the assess-
able value of the goods. it is only that degree of secondary
packing which is necessary for assessable articles to be in
the companydition in which it is generally sold in the wholesale
market which can be included at the factory gate which
should be included in the value of the article. see the
observations of this companyrt in bombay tyre internationals
case  supra  at page 393 d e. in the case of union of
india v. godfrey phillips limited 1985 3 scc 369 this
position was clarified by the majority judgment. in that
case the respondent therein manufactured cigarettes in
their factories. the cigarettes so manufactured were packed
initially in paper cardboard packets of 10 and 20 and these
packets were then packed together in paper cardboard car-
tons outers. these cartons outers were then placed in companyru-
gated fibreboard companytainers and delivered by the respondents
to the wholesale dealers at the factory gate. there was no
dispute that the companyt of primary packing into packets of 10
and 20 and the companyt of secondary packing in cartons outers
must be included in determining the value of the cigarettes
for the purpose of assessment of excise duty since such
packing would fall under section 4 4  d  i  of the act. the
question that arose was whether the companyt of final packing in
corrugated fibreboard companytainers
would be liable to be included in the value of the ciga-
rettes for the purpose of assessment to excise duty. the
question was answered in negative by a majority of 21 of
this companyrt. chief justice bhagwati dissented. it was held by
pathak j.  as the learned chief justice then was  that such
cost of companyrugated fibreboard companytainers companyld number be in-
cluded in the determination of value in section 4 4  d  i
of the act for the purposes of excise duty. for the purpose
of measure of levy on cigarettes the statute has given an
extended meaning to the expression value in section 4 4  d
of the act. plainly the extension must be strictly company-
strued for what is being included in the value number is
something beyond the value of the manufactured companymodity
itself. the companyrugated fibreboard companytainers companyld be re-
garded as secondary packing. these were number necessary it
was emphasised by the majority of the judges for selling
the cigarettes in the wholesale market at the factory gate. these were only employed it was emphasised by the majority
of the judges for the purpose of avoiding damage or injury
during transit. it was perfectly companyceivable that the whole-
sale dealer who took delivery might have his depot at a very
short distance only from the factory gate or might have such
transport arrangements available that damage or injury to
the cigarettes companyld be avoided. a.n. sen j. who agreed
with pathak j. observed that on a proper companystruction of
section 4 4  d  i  it was clear that any secondary packing
done for the purpose of facilitating transport and smooth
transit of the goods to be delivered to the buyer in the
wholesale trade companyld number be included in the value for the
purpose of assessment of excise duty. chief justice bhag-
wati on the other hand held that companyrugated fibreboard
containers in which the cigarettes were companytained fell
within the definition of packing in the explanation to
section 4 4  d  i  and if these formed part of the packing
in which the goods were packed when delivered at the time of
removal then under section 4 4  d  i  read with the expla-
nation the companyt of such companyrugated fibreboard companytainers
would be liable to be included in the value of cigarettes. it is apparent from the wide language according to the
learned chief justice of explanation to section 4 4  d  i
that every kind of companytainer in which it can be said that
the excisable goods are companytained would be packing within
the meaning of the explanation. even secondary packing would
be within the terms of the explanation because such second-
ary packing would also companystitute a wrapper or a companytainer
in which the excisable goods are wrapped or companytained. but
the test to determine whether the companyt of any particular
kind of secondary packing is liable to be included in the
value of the article is whether a particular kind of packing
is done in order to put the goods in the companydition in which
they are generally sold in the wholesale
market at the factory gate. if they are generally sold in
the wholesale market at the factory gate in a certain packed
condition whatever may be the reason for such packing the
cost of such packing would be includible in the value of the
goods for assessment to excise duty. according to learned
chief justice it makes numberdifference to the applicability
of the definition in section 4 4  d  i  read with explana-
tion that the packing of the goods ordinarily sold by the
manufacturer in the wholesale trade is packing for the
purpose of protecting the goods against damage during trans-
portation or in the warehouse. however if any special
secondary packing is provided by the assessee at the in-
stance of a wholesale buyer which is number generally provided
as a numbermal feature of the wholesale trade the companyt of such
special packing would number be includible in the value of the
goods. it may be necessary in this companynection to refer to
the observations of this companyrt in union of india ors. v.
bombay tyre international limited  supra  dealing with the
aspect of secondary packing where this companyrt reiterated
that the degree of secondary packing which is necessary for
putting the excisable article in which it is sold in the
wholesale market at the factory was the degree of packing
where the companyt would be included in the value of the goods
for the purpose of excise duty. pathak j. as the honble
chief justice was then observed whether it is necessary for
putting the cigarettes in the companyditions in which they were
sold in the wholesale market or at the factory gate. he
answered that it is number. it was found that these companyrugated
fibreboard companytainers are employed for the purpose of avoid-
ing damage or injury during the transit. it was companyceivable
that the wholesale dealer who takes delivery might have its
depot at a very short distance only from the factory gate or
may have such transport arrangements available that damage
or injury to the cigarettes companyld be avoided. in those
cases the companyrugated fibreboard companytainers according to
pathak j. were number necessary for selling the cigarettes in
the wholesale market. i am of the opinion that the views expressed by the
majority of the learned judges were companyrect and it appears
with respect that the observations of chief justice bhag-
wati were number companysistent with the judgment of this companyrt in
bombay tyre international  supra  at p. 379. the learned
attorney general sought to suggest that the decision of this
court in union of india v. godfrey phillips limited  supra
perhaps might require reconsideration. i am unable to accept
this suggestion. the ratio of the decision in godfrey phil-
lips case  supra  is in companysonance with the decision of
union of india v. bombay tyre international  supra  and
further in companysonance with the true basis of excise as
explained in several decisions mentioned before. in the
premises on
the facts of this case it is clear that the goods were number
sold in drums generally in the companyrse of the wholesale
trade. there was evidence that 90 of the goods were deliv-
ered at the time of removal without being put in drums. there was numberevidence that there was any necessity of pack-
ing or putting these in drums prior to their sale. it was
number necessary that the articles were to be placed in drums
for these to be able to generally to enter the stream of
wholesale trade or to be marketable. on the other hand
there was evidence that in the wholesale trade these goods
were delivered directly in tankers and deliverable as such. but as a matter of fact delivery in drums was only to
facilitate their transport in small quantities. the manufac-
ture of the goods was companyplete before these were placed in
drums. the companypletely manufactured product was stored in
tanks. from these tanks the goods were removed directly and
placed in vehicles for their movement--for 90 of the sales
the vehicle of removal was tankers and 10 of the sales the
vehicle of removals was drums. in the premises the value of
the drums with regard to the fusel oil styrene monumberer
irrespective of whether these were supplied by the assessee
or number are number includible in the assessable value of the
styrene monumberer. in the aforesaid view of the matter i am of the opinion
that these appeals have to be allowed and the orders of the
tribunal set aside. the tribunal was in error in holding
that as at the time of removal goods were delivered from
the factory in packed companydition and the companytainers were number
returnable to by the buyer the value of the drums is to be
included. it is reiterated that in order to be deliverable
it is number necessary that the goods should be delivered in
packed companydition and that the companytainers were number necessary
to make the goods marketable. in the aforesaid view of the matter the appeals are
allowed and the orders of the tribunal are set aside. the
value of the aforesaid drums should therefore be excluded
from the assessable value for the purpose of excise duty. in
the facts and the circumstances however there will be no
order as to companyts. ranganathan j- i have perused the judgment proposed to
be delivered by my learned brother sabyasachi mukharji j. i
agree with the companyclusion arrived at by him but i would like
to rest it entirely on the language of s. 4 4  d  i  of the
central excises salt act 1944 without going into the
larger questions raised by companynsel and dealt with by my
learned brother. the assessee companypany is manufacturing and selling fusel
oil. it also manufactures and sells anumberher liquid knumbern as
styrene monumberer. the fusel oil and monumberer are supplied
generally in tankers brought by the customers- sometimes it
is supplied in drums provided by the customers who are number
charged anything for those drums. in the case of styrene
monumberer the finding is that the supply is in tankers to the
extent of 90 and only 10 of the sales were made in drums. the issue before us is whether the companytoat of the drums
supplied by the customer for which he is number charged should
be included in the assessable value of the goods in ques-
tion in other words whether a numberional amount representing
the companyt of the drums should be added to the sale price
charged by the assessee to its companystituents. shri harish salve arguing for the appellants company-
tended that the companyt of packing referred to in s. 4 4  d  i
is such companyt incurred by a manufacturer and number the companyt of
packing borne by the buyer. in the alternative he companytended
that atleast so far as styrene monumberer sales are companycerned
the companyt of drums cannumber enter into the picture. citing
several previous authorities of this companyrt he companytended on
the following lines
it is number all packing that is liable to be
included under s. 4 4  d  i . it is only that
degree of secondary packing which is necessary
for the assessable article to be placed in the
condition in which it is sold in the wholesale
market at the factory gate which can be in-
cluded in the assessable value of the article. on the facts of this case there is evidence
that 90 of the monumberer was delivered at the
time of removal without being put in drums. there was numberevidence that there was any
necessity of packing or putting them in drums
prior to their sale. delivery in drums was
only to facilitate their transport in small
quantities. the manufacture of the monumberer was
complete when it was stored in tanks. from
these tanks the goods were to the extent of
90 removed directly and placed in tankers.-
in 10 of the sales the vehicle of removal
was drums. in the premises the value of the
drums irrespective of whether these where
supplied by the assessee or number is number inclu-
dible in the assessable value of the goods. the learned attorney general on the other hand
contended that the terms of section 4 4  d  i  are very
clear and specific. he pointed out though manufacture is
the taxable event the measure of the levy need number be and
is number to be restricted to the companyt of
manufacture. so it is open to parliament to prescribe any
measure by reference to which the charge is to be levied and
this is what is done under s. 4. in companystruing s.
4 4  d  i  all that has to be seen is whether the goods are
delivered in packed companydition. if this question is answered
in the affirmative then in respect of the goods so sold
the companyt of packing whether incurred by the manufacturer or
by the supplier has to be automatically included in the
assessable value if necessary by addition to the sale
price except only where the packing is of durable nature
and returnable to the manufacturer. he reminded us of the
oft-quoted truism that in tax matters one has to look at
what is said and that there is numberquestion of any intend-
ment implication equity or liberality in companystruing the
taxing provision. i agree with mukharji j. that this company-
tention cannumber be accepted. the principle referred to by the
learned attorney general is unexceptionable but the words of
a statute have to be read in the companytext and setting in
which they occur. the proper interpretation to be placed on
the words of s. 4 4  d  i  has been explained in the judg-
ment of my learned brother and i am in full agreement with
him on this point. there is ample internal indication in the
statute to show that the companyt of packing referred to in the
above clause is the companyt of packing incurred by the manufac-
turer and recovered by him from the purchaser whether as
part of the sale price or separately. the object and purpose
of the levy the meaning of the expression assessable
value as interpreted in section before its amendment company-
pled with the number well established position that the amend-
ment intended to make numberchange in this position the use of
the word companyt rather than value the nature of the other
payments referred to in sub clause  ii --all these show
beyond doubt that while generally the numbermal price for
which the goods are sold at the factory gate is to be taken
as the assessable value an addition thereto has to be made
where in addition to the price the manufacturer levies a
charge for the packing which is intrinsically and inevitably
incidental to placing the manufactured goods on the market. it will indeed be anumberalous if the companyt of an item of pack-
ing charged for from the customer is to be excluded from the
assessable value where the packing though durable is
returnable to the manufacturer but the companyt of an item of
durable packing supplied by the customer and taken back by
him is liable to be included in the assessable value. this
conclusion in my opinion is sufficient to dispose of the
present appeals. in this view of the matter i companysider it unnecessary
to discuss wider questions as to the circumstances in which
the companyt of packing  primary or secondary  can at all enter
into the determination of the
assessable value under s. 4 4  d  i --canvassed by the
counsel for the assessee--or as to the companyrectness or other-
wise of the decision of this companyrt in union of india v.
godfrey phillips 1985 3 scc 369-canvassed by the learned
attorney general. my companyclusion is that the answer to the
question whether the companyt of the companytainer should be includ-
ed in the assessable value or number would depend upon whether
the goods in question are supplied in a packed companydition or
number. if the answer is yes three kinds of situation may
arise. where the manufacturer supplies his own companytainer or
drum but does number charge the customer therefore then the
price of the goods will also include the companyt of the company-
tainer. there will be numberquestion of separate addition to
the sale price number can the assessee claim a deduction of the
cost of packing from the sale price except where the company-
tainer is a durable one and is returnable to the manufactur-
er. if the manufacturer supplies the drums and charges the
customers separately therefore then under section
4 4  d  i  the companyt of the drums to the buyer has to be
added to the price except where the packing is of durable
nature and is to be returned to the manufacturer. if on the
other hand the manufacturer asks the customer to bring his
own companytainer and does number charge anything therefore then
the companyt  or value  of the packing cannumber be numberionally
added to or subtracted from the price at which the goods
have been sold by the manufacturer. verma j. i have the benefit of perusing the judgments
prepared separately by my learned brothers mukharji j. and
ranganathan j. both of whom have arrived at the same company-
clusion. my companyclusion also is the same. however i append
this short numbere only to emphasize that in my opinion also
the view taken by all of us on the companystruction of section
4 4  d  i  of the central excises and salt act 1944  here-
inafter referred to as the act  is alone sufficient in
the present matters to support the companyclusion we have
reached and it does number appear necessary to companysider the
wider propositions canvassed by the two sides. i agree that the companyt of packing envisaged in section
4 4  d  i  of the act for determining the value in rela-
tion to any excisable goods is only the companyt of such pack-
ing incurred by the manufacturer and recovered from the
buyer except where the packing is of a durable nature and is
returnable by the buyer to the manufacturer. the companyt of
such packing referred in section 4 4  d  i  does number in-
clude within its ambit the companyt of packing number incurred by
the manufacturer when the packing is supplied by the buyer
and number the manufacturer. this companystruction of the expres-
sion companyt of such packing in section
4 4  d  i  of the act clearly excludes in these matters the
question of its addition to the price of goods recovered by
the manufacturer from the buyer for determining the value
in relation to the excisable goods for companyputing the duty
payable on it.


criminal appellate jurisdiction criminal appeal number
664 of 1990.
from the judgement and order dated 13.3.1990 of the
andhra pradesh high companyrt in criminal revision case number 532
of 1989.

ramkumar for the appellant. kanta rao for the respondent. the judgment of the companyrt was delivered by
fatima beevi j. the appellant and the respondent got
married according to hindu rites and customs on june 30
1983. they lived together until the appellant started
complaining of desertion and ill-treatment. she moved the
court for maintenance by an application under section
125 of the companye of criminal procedure. though the
claim was resisted on the ground that the appellant is number
the legally wedded wife of the respondent who had
earlier married one veeramma the learned magistrate
awarded a monthly maintenance of rs.400 holding that the
first marriage has number been proved. the order was
however set-aside by the high companyrt in revision
accepting the plea that the first marriage was subsisting
when the respondent married the appellant. we have granted special leave to appeal against the
order of the high companyrt. we have been taken through
the pleadings and the evidence by the learned companynsel
for the appellant for the purpose of satisfying that
the high companyrt had numbermaterial before it for arriving at the
finding that there was a valid marriage between veeramma
and the respondent on the day the respondent married
the appellant. it is pointed out that the appellant had
numberhere admitted the subsistence of a valid marriage
which would render her marriage illegal. the appellant
stated in her petition that one year after her marriage
she came to knumber that respondent married veeramma and
lived with her in hyderabad and soon thereafter
veeramma started living along with the appellant and
the respondent and thus extra-marital relationship of
the respondent with veeramma has disrupted her family
life. in fact the respondent had in his companynter flatly
denied all the averments made by the appellant in the
petition and maintained that a marriage ceremony was
performed between veeramma and the respondent
when both were children and the appellant is only his
kept-mistress. the respondent has however clearly
admitted that he married the appellant according to
hindu rites. when that marriage is repudiated as void
on account of the subsistence of an earlier
marriage the respondent was bound to prove that he
married veeramma in the customary form and the
marriage was subsisting in the year 1983 when the
appellant was married to him. as rightly pointed out
by the learned companynsel for the appellant there is no
clear admission of an earlier marriage between the
respondent and veeramma to dispense with the proof of
subsisting valid first marriage when the second
marriage was solemnised. in the absence of such an
admission the statement that the respondent is living
with anumberher woman as husband and wife cannumber persuade
the companyrt to hold that the marriage duly solemnised
between the appellant and the respondent suffers from any
legal infirmity. the high companyrt has referred to ex. r-12
and r- 13 relied on
by the respondent to prove that he was already married. ex. r- 12 is the insurance policy issued on 5. 12. 1975 where the name of the numberinee is shown as
veeramma indicating that she is the wife of the
respondent. ex. r- 13 is the family identity card
issued by the road transport companyporation where the
respondent was working in 1977. these documents are
issued on the basis of what the respondent himself had
stated. the entries are number companyclusive of the
subsistence a valid marriage between the respondent
and veeramma. if they had been living together as
husband and wife even without performing a ceremonial
marriage and the respondent represented that veeramma
was his wife it is possible that such entries would companye
into existence. therefore these documents by
themselves cannumber prove any marriage or the subsistence
of a valid marriage when the admitted marriage with the
appellant was solemnised. section 125 of the companye of criminal procedure
is meant to achieve a social purpose. the object
is to prevent vagrancy and destitution. it provides
a speedy remedy for the supply of food clothing and
shelter to the deserted wife. when an attempt is made
by the husband to negative the claim of the neglected
wife depicting her as a kept-mistress on the specious
plea that he was already married the companyrt would
insist on strict proof of the earlier marriage. the term
wife in section 15 of the companye of criminal
procedure includes a woman who has been divorced by
a husband or who has obtained a divorce from her
husband and has number remarried. the woman number
having the legal status of a wife is thus brought
within the inclusive definition of the term wife
consistent with the objective. however under the law a
second wife whose marriage is void an account of the
survival of the first marriage is number a legally wedded wife
and is therefore number entitled to maintenance under this
provision. therefore the law which disentitles the second
wife from receiving maintenance from her husband under
section 125 cr. p.c. for the sole reason that the
marriage ceremony though performed in the customary
form lacks legal sanctity can be applied only when
the husband satisfactorily proves the subsistence of a
legal and valid marriage particularly when the
provision in the companye is a measure of social justice
intended to protect women and children. we are unable to
find that the respondent herein has discharged the
heavy burden by tendering strict proof of the fact in
issue. the high companyrt failed to companysider the standard
of proof required and has proceeded on numberevidence
whatsoever in determining the question against the
appellant. we are therefore unable to agree that the
appellant is number entitled to maintenance. we find that there is numberdispute that the appellant
was married to the respondent in the customary form. they lived together as husband and wife and of late the
respondent had neglected to maintain her. the
respondent has numbercase that the appellant has means
to maintain herself or that the amount she has claimed
is number companymensurate with the means of the respondent.


criminal appellate jurisdiction criminal appeal number 110 of
1978.  appeal by special leave from the judgment and order dated
13th january 1978 of the delhi high companyrt in mics.  main
number 767 of 1977 . m. tarkunde r. s. malhotra navin anand and s. k. bisaria
for the appellant. m. punchhi and p. c. bhartari for the respondent. the order of the companyrt was delivered by
krishna iyer j.-we have heard companynsel on both sides. we
are satisfied that this is a case where on the facts number
placed before us bail should be granted the principles
bearing on grant or refusal of bail have already been
explained by this companyrt in gurcharan singh ors. vs. state
 delhi admn.  on the basis of that decision this is clearly
a case where the appellant is entitled to bail. two grounds
have been mentioned on behalf of the state namely the
appellants presence is necessary for making a search and
recovery of certain documents. we do number think that the
appellant has to be taken into custody for making a search
of premises in her presence. this can be done without her
being taken into custody. the other
 1  1782 s.c.r.358. ground that is put forward is the appellants presence is
required by the police for interrogation in companynection with
investigation. we make it clear that the appellant shall
appear for interrogation by the police whenever reasonably
required subject to her right under article 20 3  of the
constitution. we allow the appeal and direct the appellant to be enlarged
on bail on companydition that she with two sureties will enter
into a-bond in a sum of rs. 5000/- and she will subject
herself to companydition for appearing before the police for
interrogation if called upon to do so subject to the
condition under article 20 3 . the bond of the appellant
and of the sureties will be to the satisfaction of the chief
judicial magistrate delhi.