The division bench consisting of Justices B P Jeevan Reddy and Suhas C Sen thus overruled the decision of the Bombay High Court in this regard.
The high court had held that the charges for printing and coating extrusion tubes, apart from the caps put on them, should be deducted for the assessment.
The judgment was delivered in the context of the agreement between Metal Box Company and Colgate Palmolive (India) Ltd. It said Metal Box supplied the bare extruded aluminium tubes to Colgate Palmolive. After the delivery, processes like making it collapsible, printing, coating and fitting caps are done. The contention of Metal Box was that it manufactured only the tubes, and therefore, the price of other processes should not be considered for the excise assessment. Nevertheless, the authorities issued a demand notice, including the total price for the assessment.
Metal Box challenged the notice in the high court and won. The authorities appealed to the Supreme Court with success. The court followed its leading judgments in the Bombay Tyre International and Madras Rubber Factory cases.
In the Bombay Tyre case, it has been held that the wholesale cash price at the place of removal is the basis for determination of value of an excisable article. Futher, the wholesale cash price at which the excisable article is sold in wholesale trade at the place of removal would represent the value of the article and no deduction was permissible except trade discount and the duty payble.
In the case of caps on the tubes, the Supreme Court said the assessibility depended on the facts of the case. Therefore, it asked the concerned authorities to reconsider it in the case of Metal Box.
