Civil Appeal No 301 of 1984
From the Judgment and order dated 121983 of the Punjab and Haryana High Court in Letters Patent Appeal No 1410 of 1982
PD Sharrna for the Appellant
623 Parmod Dayal for the Respondents
The Judgment of the Court was delivered by DUTT J
This appeal by special leave is directed against the judgment of the Division Bench of the High Court of Punjab  Haryana whereby the High Court dismissed in limine the letters patent appeal preferred by the appellant against the judgment of a learned Single Judge of the High Court dismissing the writ petition of the appellant relating to his seniority
The appellant was appointed an Assistant Engineer II with effect from June 10 1963 in the Punjab State Electricity Board on probation for two years which ended on June 10 1965
After the bifurcation of the Punjab State Electricity Board the service of the appellant was allocated to the Haryana State Electricity Board hereinafter referred to as the Board 
As a result of a disciplinary proceeding held against the appellant on April 15 1968
a minor penalty for the stoppage of one increment without any future effect was imposed on the appellant by the Board
After the expiry of one year the appellant was however given the increment
Although the probationary period of the appellant was completed on June 10 1965 he was not confirmed within a reasonable time thereafter
There is also no material to show that his period of probation was extended
In the meantime some substantive posts of Assistant Engineers Class II fell vacant and by an order dated March 30 1970 of the Secretary to the Board the appellant and the respondents Nos 2 to 19 were confirmed as Assistant Engineers Class II
It has been specifically stated in the said order that the officers mentioned therein that is the appellant and the respondents Nos 2 to 19 had satisfactorily completed the probationary period of two years
It however appears from the said order that respondents Nos2 to 14 were confirmed in the posts of Assistant Engineers Class II with effect from April 1 1969 while the appellant was confirmed in that post with effect from December 1 1969
Consequently the appellant s name was placed last of all the confirmed officers
In the seniority list also the name of the appellant was placed against serial No 63 that is below the names of the respondents Nos 2 to 19 although the seniority list appears to have been prepared on the basis of the respective dates of appointments of the officers
As the appellant was appointed on June 10 1963 his name should have been placed below the name of Pawan Kumar Aggarwal Serial No 45 respondent No 3 624 appointed on June 7 1963 and above the name of Sudesh Kumar Tuli Serial No 46 respondent No 2 appointed on June 21 1963 but his name was placed below that of Ved Prakash Lalit Serial No 62 who was appointed on April 7 1964
In other words the names of the respondents Nos 2 and 4 to 19 who are all juniors to the appellant were placed above the name of the appellant in the seniority list without any reason whatsoever
Being aggrieved by the impugned order of the Board dated March 30 1970 and also the seniority list wherein the appellant s name has been placed below the names of his juniors namely respondents Nos 2 and 4 to 19 the appellant filed a writ petition before a Single Judge of the Punjab  Haryana High Court
As stated already the learned Single Judge dismissed the writ petition and the letters patent appeal preferred by the appellant against
the order of the learned Single Judge was also dismissed
Hence this appeal
It may be stated here that respondent No 4 SP Nlidha is since dead
The only point that is involved in this appeal is whether the Board was justified in confirming the appointment of the appellant in the post of Assistant Engineer Class II with effect from December 1 1969 and placing him below his juniors namely respondents Nos 2 and 4 to 19 in the seniority list
As has been noticed already there is no material to show why the appellant was confirmed in the post with effect from December 1 1969 when he had completed his probationary period of two years satisfactorily
It is submitted on behalf of the Board that as the minor penalty was imposed on the appellant by way of stoppage of his increment for one year he was confirmed with effect from December 1 1969 and placed below the respondents Nos 2 and 4 to 19 in the seniority list
We are unable to accept the above contention
The penalty was imposed on April 15 1968 and as a result of which he was deprived of the monetary benefit of one increment for one year only
The penalty by way of stoppage of one increment for one year was without any future effect
In other words the appellant s increment for one year was stopped and such stoppage of increment will have no effect whatsoever on his seniority
Accordingly the Board acted illegally and most arbitrarily in placing the juniors of the appellant above him in the seniority list andor confirming the appellant in the post with effect from December 1 1969 that is long after the date of confirmation of the said respondents Nos 2 to 19
The question of seniority has nothing to do with the penalty that was imposed upon the appellant
It 625 is apparent that for the same act of misconduct the appellant has been punished twice that is first by the stoppage of one increment for one year and second by placing him below his juniors in the seniority list
The appellant should have been confirmed on June 10 1965 on which date he had completed two years of his probationary period
As has been stated already the probationary period was not extended
The Board has not laid down any guideline for confirmation
There is no rule showing when an officer of the Board will be confirmed
While there is some necessity for appointing a person in government service on probation for a particular period there may not be any need for confirmation of that officer after the completion of the probationary period
If during the period of probation a government servant is found to be unsuitable his services may be terminated
On the other hand if he is found to be suitable he would be allowed to continue in service
The archaic rule of confirmation still in force gives a scope to the executive authorities to act arbitrarily or malafide giving rise to unnecessary litigations
It is high time that the Government and other authorities should think over the matter and relieve the government servants of becoming victims of arbitrary actions
In this connection we may refer to the decision in the case of SB Patwardhan  others vs State of Maharashtra  Ors
  where Chandrachud CJ speaking for the Court observed as follows Confirmation is one of the inglorious uncertainties of government service depending neither on efficiency of the incumbent nor on the availability of substantive vacancies
A glaring instance widely known in a part of our country is of a distinguished member of the judiciary who was confirmed as a District Judge years after he was confirmed as a Judge of the High Court
It is on the record of these writ petitions that officiating Deputy Engineers were not confirmed even though substantive vacancies were available in which they could have been confirmed
It shows that confirmation does not have to conform to any set rules and whether an employee should be confirmed or not depends on the sweet will and pleasure of the Government
In the instant case although the Board found that the appellant had satisfactorily completed his period of probation yet he was placed below his juniors in the seniority list without any rhyme or reason
There is no explanation why the confirmation of the appellant was deferred till December 1 1969
It is however submitted on behalf of 626 the Board that after some substantive posts had fallen vacant on April 1 1969 the question of confirmation of the appellant and the respondents Nos
2 to 19 was taken into consideration
This submission is not supported by any material on record inasmuch as there is nothing to show when these posts had fallen vacant
It is difficult to accept that all these posts had fallen vacant on the same day that is on April 1 1969
We have therefore no hesitation in holding that the vacancies had occurred before that day but the Board did not care to take up the question of confirmation for reasons best known to it
That facts stated hereinabove disclose that the Board had acted arbitrarily at its sweet will and without any justification whatsoever in making the appellant junior to the respondents Nos 2 and 4 to 19 who are admittedly juniors in service to the appellant
For the reasons aforesaid the judgment of the learned Single Judge and that of the Division Bench of the High Court and the impugned seniority list are set aside
We direct that a fresh seniority list shall be prepared by placing the appellant immediately below Pawan Kumar Aggarwal and above Sudesh Kumar Tuli within six weeks from date and maintain the seniority of the appellant as directed in the post to which the appellant has been promoted in the meantime 
The appeal is allowed with costs quantified at Rs5000 GN Appeal allowed


Summary:
The appellant manufactured various types of glass bottles which were assessed to duty under Item No 23A of the Central Excise Tariff
It sold the glass bottles to the customers on wholesale basis packed in gunny bags and cartons which were durable and returnable
According to the appellant it has been paying duty on glass bottles on the basis of the assessable value which included the cost of packing material namely the gunny bags and cartons
The returned gunny bags and cartons were re used by the appellant
The appellant submitted for approval price list in regard to the glass bottles manufactured by it showing separately the price at which the goods were actually sold and the cost of packing
Returning the price list duly approved the Superintendent of Central Excise noted therein that the price should be inclusive of the cost of packing and packing charges in terms of Section 44d of the Act
The appellant was paying duty on the cost of packing under protest and lodged claims of refund
As the appellant did not receive either the refund or any intimation rejecting the claim for refund it filed a writ petition before the High Court which remanded the case back to the Assistant Collector for deciding the matter after giving the appellant fair and adequate opportunity to adduce evidence
The Assistant Collector after considering the written statements filed by the appellant rejected the appellant s claim for refund and demanded duty for the subsequent period
The appellant filed an appeal before the Collector of Central Excise Appeals which was rejected
The appeal filed before the Customs Excise and Gold Control Appellate Tribunal was also dismissed
This appeal under Section 35L of the Act is against the Tribunal s judgment
588 Dismissing the appeal  HELD 1
In view of the facts of the case and the expressions used in Section 44di of the Act there being no evidence of the agreement that the cartons and gunny bags were returnable the Tribunal was right in coming to the conclusion that the cartons and gunny bags were not returnable in the accepted sense of the term
592G B C 21 The appellant manufactured glass bottles and delivered these in two types of packing namely in open crates and in cartons and gunny bags
So far as the crates were concerned the same belonged to the appellant
The customer was billed for the cost of glass bottles only
The crates were returnable to the appellant within 30 days
The revenue has not included the cost of such crates in the assessable value
The revenue has also not included the cost of packing if any supplied by the customer himself
There was no dispute about these packings
So far as the packings in cartons and gunny bags were concerned it was noted by the Tribunal that these belonged to the appellant but their cost was realised from the customer along with the cost of glass bottles
It cannot be said that the packing is returnable by the buyer to the assessee unless there is an arrangement between them that it shall be returned
Actual return or extent of return is not relevant
What is necessary is that if the buyer chooses to return the packing the seller should be obliged to accept it and refund the stipulated amount
In this case there was no clause about returnability of the cartons and gunny bags
591B F 22
So far as the question of durability is concerned there cannot be such controversy about it but a question has been raised as to what is the meaning and connotation of the word returnable
What Section 44di excludes from computation in cost of packing which is of a durable nature and is returnable by the buyer to the assessee
The packing must be one which is returnable by the buyer to the assessee and obviously that must be under an arrangement between the buyer and the assessee
It is not the physical capability of the packing to be returned which is the determining factor because in that event the words by the buyer to the assessee need not have found a place in the section they would be superfluous
592D F K Radhakrishnaiah vs Inspector of Central Excise and others referred to