The court said that the earlier judgements which said the costs of such packing was excluded as the packing was just to prevent damage and injury was misunderstood by many.
... where the packing is for preventing damage or injury to the goods, the costs of such packing is to be excluded from the value of the goods, the court observed.
According to Section 4 of the Central Excise and Salt Act, 1944, the cost of packing was included in the value of goods unless the packing was of durable nature and was returnable by the buyer to the assessee. Besides, the value is to be the normal price at which the goods were ordinarily sold in the course of wholesale trade for delivery at the time of removal.
Packaging in this context means the wrapper, container, spool, reel, beam, etc in which or on which the excisable goods are wrapped, contained or wound.
According to the apex court, it was not necessary that the crates should be actually returned. So long as there is an obligation on the seller to take back crates, if buyer chooses to return them, it is sufficient.