vil Appeal No 2043 NM of 1989
From the Judgment and Order dated 28111988 of the Customs
Excise and Gold Control Appellate Tribunal New Delhi in Appeal No EA No 330287A in Order No 55888 A K Parasaran Attorney General AK Ganguli and P Parmeshwaran for the Appellant
Soli J Sorabji section Ganesh R Narain PK Ram and DN Mishra for the Respondent
The following Judgments of the Court were delivered SABYASACHI MUKHARJI J This is an appeal under section 35Lb of the Central Excises  Salt Act 1944 hereinafter called the Act  from the judgment and order of the Cus toms Excise  Gold Control Appellate Tribunal New Delhi hereinafter called the Tribunal  date 28th November 1988
Ms Ponds India Ltd hereinafter referred to as the respon 482 dent  used to manufacture talcum powder and face powder falling under tariff item 14F of the Central Excise Tariff which are now under sub heading No 330400 and were clear ing the same on payment of duty
The assessee claimed deduc tion of cost of packing for transportation in respect of small packings of 15 18 20 30 40  100 gms
powder ranging from 027 paise to 076 paise per dozen packings and the same was approved provisionally by the office of the Asstt
Collector of Central Excise Pondicherry
The said approval was by an order dated 10th December 1985
It is alleged that it was later noticed that the small packs were first packed in dozen and then packed in secondary packings for easy transportation to the wholesale dealer and it was found that the secondary packings were a must for delivery to the wholesale dealers emphasis indicated
The Asstt
Collector came to the conclusion that the amount as claimed by the respondent was not deductible as per this Court s decisions in respect of postmanufacturing expenses
In the premises a show cause notice was issued to the respondent on October 30 1986 and a demand was made for the differen tial duty on the cost of secondary packings which was stated to be Rs34615192 for the period from December 2 1985 to May 31 1986
The Asstt
Collector by his order dated Febru ary 27 1987 disallowed the respondent s claim for exclusion of the cost of packing of transportation and thus rejected its claim
He inter alia observed as follows Therefore I consider that the cost of sec ondary packings viz card board cartons are rightly includible in the assessable value of items mentioned in PL No 40585 86 and 40685 86 dated 101285 under Section 44di of the  and the provisional assessments are to be finalised accordingly
The assessees are also liable for payment of differential duty of Rs346 15 192 as demanded in the show cause notice cited under Section 11A of the read with rule 9B of the Central Excise Rules 1944
 There was an appeal to the Collector of Customs which was disposed of by an order dated 15th September 1987
It is necessary to set out the said observations of the Collec tor in view of the contentions sought to be raised in these matters
He inter alia observed as follows I have carefully considered the submission of the appellants made in their grounds of appeal and repeated during 483 personal hearing
I find that the appellant s claim is solely based on the judgment of the Hon ble Supreme Court in the case of Godfrey Philips and which has been followed by differ ent High Courts also from time to time
First of all it is necessary to consider whether the goods sold by the appellants viz talcum powder and face powder required an outer carton packing for purpose of safety in trans it which was the case before the Hon ble Supreme Court in case of Ms Godfrey Philips
It cannot be disputed that talcum powder and face powder are packed either in metal con tainers or in plastic packing also of card board packings which are inner cartons and contain one dozen
The same are then put in the master carton for purpose of delivery to wholesale dealers
In the Hon ble Supreme Court s judgment it is stated that the corru gated fibre board containers are employed only for purpose of avoiding damage or injury during transit
But that is not as in the case of the appellants
There is no likelihood of any damage or injury to the tins or the plas tic containers employed as a primary packing even if the goods are transported without the outer packing
Unlike cigarettes even damp ness is not going to affect the goods because they are hermetically sealed when put in the primary packing
Therefore the ratio of the judgment of Hon ble Justice Pathak which is quoted by the appellants is not available in the case of different goods which are not perishable aS cigarettes are
The second point is that cigarettes are sold by carton of 200 cigarettes each even in wholesale trade
That is not the case in the appellant s wholesale trade where the goods are sold by number of dozens and in some cases by numbers of tins or other packings which are primary packing this was seen from the invoice produced during personal hearing
Therefore it cannot be said that the outer cartons are employed only for the purpose of avoiding damage or injury to the goods during transit
In view thereof the Hon ble Supreme Court s decision in the case of MRF becomes applicable
In case of talcum powder and face powder it is necessary to put the dozen cartons inside the outer cartons for giving delivery whether at the factory gate or at a place of delivery other than the factory gate because it is not convenient for the wholesale dealers to col lect the goods in dozens  packing
Wholesale trade is not generally in quantities less than a dozen
Therefore even while giving 484 delivery by the wholesale dealers to other dealers the outer carton is necessary as otherwise it will become difficult for him to give such delivery of 50 dozens or 100 dozens of the goods
It is not disputed that the outer carton packing is the packing in which the goods are cleared from the factory and are put into the stream of wholesale trade   the ratio of the Godfrey Phi lips case is not applicable in the appellant s case
I find that the talcum powder and face powder are cleared in the master carton pack ing in the factory and it is in that packing the same are put in the stream of wholesale trade
Further I do not find that the master cartons are employed solely for purpose of protecting the goods during transit
But the same are used for giving delivery in wholesale trade by the appellants
Therefore the order of the Asstt
Collector including the cost of master cartons in assessable value of the goods is correct and proper and needs no interference
That being the only point for determination in appeal the appeal is reject ed
 There was an appeal to the Tribunal
It was contended on behalf of the respondent herein before the Tribunal that the only question for determination was whether the cost of third stage packing the outer carton intended for trans port can be included in the assessable value
It was pleaded that all goods were cleared from the factory in the outer cartons with the smaller carton containing dozen containers of powder
It was further contended that the facts of this case were same as in the case of cigarettes dealt with by this Court in Union of India  Ors
vs Godfrey Philips India Ltd  It is contended that in view of the said decision of this Court cost of cartons was included only if packing was necessary for the sale of goods in the wholesale market
It is submitted that it was not so necessary for sale
The Tribunal noted that the question of inclusion of cost of secondary packing in Sec tion 44di of the Act be it at the first stage second or third stage of packing has to be decided in each case depending upon the facts applicable
The Tribunal found that so far as the smaller carton is concerned the inclusion of the cost of the same in the assessable value was not in dispute and the appellants have conceded that the value is includible following the ratio of the judgment of this Court
It also noted that it was nobody s case that the number of tins contained in the smaller carton constitute retail packing rather than wholesale packing
The Tribunal felt that the only question to be decided was whether the goods packed in the smaller cartons could be sold to the wholesale buyer in the course of wholesale trade at the 485 factory gate without the outer carton in which the number of smaller cartons were packed
It is important to emphasise this question in view of the contentions raised in this appeal
The case of the revenue was that since the goods were sold in lots packed in the bigger outer cartons the value of the same should be included for the purpose of assessment
According to the Tribunal there was however no plea raised by the revenue as to the capability or other wise of the sale of powder tins in the wholesale market in the smaller cartons described as the inner outer
The Tribu nal noted that in the facts of the instant case the talcum powder packed in tin containers is in no danger so far as the contamination of the powder is concerned and the pack ing it was pleaded before them was required for the pur pose of preventing damage to the tin containers which were sophisticated in nature taking into account the product being marketed and it recorded that inner cartons contain 12 tins or so which is a wholesale packing and it was not made out that the smaller carton was not sufficient to protect the tins or that the sale could be made in the course of wholesale trade at the factory gate
There was no plea on record that the smaller carton is flimsy and not sufficient for the purpose of marketing the tins and their storage in the course of wholesale trade
the Tribunal referred to the observations of this Court in Union of India  Ors
vs Bombay Tyre International Ltd   and following the same came to the conclusion that the cost of outer or bigger cartons in which the smaller cartons containing powder tins are packed is not includible in the assessable value as the delivery of the goods can be taken in smaller cartons at the factory gate by a buyer in the course of wholesale trade
The outer cartons were held to be for the purpose of transport of the goods and were not required for the sale of the goods at the factory gate
The revenue seeks to challenge this basis
What is to be included in the value has to be deter mined in terms of section 44di of the Act
The ques tion has been examined from all points of views by this Court
The question of secondary packing was examined by this Court in Bombay Tyres International s case supra
There this Court observed that for the purpose of determining the value  broadly speaking both old section 4a and the new section 41aspeak of the price for sale in the course of whole sale trade of an article for delivery at the time and place of removal namely the factory gate
Where the price con templated under the old section 4a or under new section 41a is not ascertainable the price is determined under the old section 4b or the new section 41b
Now the price of an article is related to its value using this 486 term in a general sense and into that value have poured several components including those which have enriched its value and given to the article its marketability in the trade
Therefore the expenses incurred on account of the several factors which have contributed to its value upto the date of sale which apparently would be the date of deliv ery are liable to be included
Consequently where the sale is effected at the factory gate expenses incurred by the assessee upto the date of delivery on account of storage charges outward handling charges interest on inventories stocks carried by the manufacturer after clearance charges for other services after delivery to the buyer namely after sales service and marketing and selling organ isation expenses including advertisement expenses marketing and selling organisation expenses and after sales service promote the marketability of the article and enter into its value in the trade
Where the sale in the course of whole sale trade is effected by the assessee through its sales organisation at a place or places outside the factory gate the expenses incurred by the assessee upto the date of delivery under the aforesaid heads cannot on the same grounds be deducted
This Court further observed that the new section 44di of the Act has made express provision for including the cost of packing in the determination of va lue  for the purpose of excise duty
The packing of which the cost is included is the packing in which the goods are wrapped contained or wound when the goods are delivered at the time of removal emphasis supplied
Therefore the cost which is incurred for making the goods available in the wholesale market and in which the goods are generally avail able in such market would be the value  which is includi ble under section 44di of the Act
There is no dispute that the cost of primary packing that is to say the packing in which the article is contained and in which it is made marketable for the ordinary consumer must be regarded as failing within section 44di of the Act
There is often as in this case secondary packing which consists of larger cartons in which a standard number of primary cartons in the sense mentioned earlier are packed
The large cartons may be packed into even larger cartons for facilitating the easier transport of the goods by the wholesale dealer
The question with which this Court was concerned in that case was is all the packing no matter to what degree in which the wholesale dealer takes delivery of the goods to be considered for including the cost thereof in the value  Or does the law require a line to be drawn somewhere This Court observed that one must remember that while packing is necessary to make the excisable article marketable the statutory provision calls for strict construction because the levy is sought to be extended beyond the manufactured article itself
Therefore this Court observed that the 487 degree of secondary packing which is necessary for putting the excisable article in the condition in which it is gener ally sold in the wholesale market at the factory gate is the degree of packing whose cost can be included in the value  of the article for the purpose of the excise duty
To that extent this Court observed the cost of secondary packing cannot be deducted from the wholesale cash price of the exciseable article at the factory gate
It was further held therein that if any special secondary packing is provided by the assessee at the instance of a wholesale buyer which is not generally provided as a normal feature of the wholesale trade the cost of the such packing shall be deducted from the wholesale cash price
Therefore it is clear by virtue of that decision that the cost of packing which is neces sary to make the exciseable article marketable that is to say in which it is generally sold in the wholesale market at the factory gate  is to be included
Therefore accord ing to the said decision and by virtue of the terms of the section the cost of that much of secondary packing which is necessary only to put the exciseable good in condition in which it is generally sold in wholesale market is the degree of packing which cost can be included and not beyond that
In the application of this principle about which there is no dispute there has been some divergence of the empha sis put on by what criterion that cost should be determined
This question came up for consideration in Union of India vs Godfrey Philips India Ltd 1985 Supp
3 SCR 123
There Chief Justice Bhagwati observed that whenever a question arises whether the cost of any particular kind of secondary packing is liable to be included in the value of the arti cle  the question to be asked is does the packed condition in which the article is generally sold in the wholesale market at the factory gate include such secondary packing The learned Chief Justice observed that if it does it would be liable to be included in the value of the article for the purpose of excise duty
It therefore followed that if the packed condition in which the cigarettes manufactured by the respondents were generally sold in that case in the whole sale market at the factory gate included packing in corru gated fibre board containers the cost of such corrugated fibre board containers was liable to be included in the value of the cigarettes for the purpose of excise duty
The learned Chief Justice further observed that the condition for applicability of the inclusive definition of value in section 44di of the act is that the goods are delivered at the time of removal in a packed condition and where this condition is satisfied the value of the goods would include the cost of such packing and such packing must obviously mean the packing in which the goods are when they are 488 delivered at the time of removal
Therefore according to the learned Chief Justice the question to be asked is what is the packed condition in which the goods are when deliv ered at the time of removal Whatever is the packing of the goods at the time when they are delivered at the time of removal the cost of such packing would be liable to be included in the value  of the goods
The Explanation to section 44di of the Act provides an exclusive definition of the term packing and it includes not only outer packing but also what may be called inner packing
The question that the Chief Justice posed was not for what purpose a particu lar kind of packing was done
The test was whether a partic ular kind of packing was done in order to put the goods in the condition in which these were generally sold in the wholesale market at the factory gate and if these were 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 includi ble in the value of the goods for assessment to excise duty
Pathak J as the learned Chief Justice was then and Sen J gave separate judgments in the aforesaid case
Setting out the passage from the Bombay Tyres International s case supra which is referred to hereinbefore Pathak J posed the question is the packing necessary for putting the cigarettes in the condition in which they are generally sold in the wholesale market at the factory gate And answering that question Pathak J held it is not
It is true that there is a divergence between the views of Bhagwati C J Pathak J and Sen J
But in my opinion there is a unanimi ty in the test that is to be applied that is to say that much of the cost would be included only which is necessary for putting the article in the condition in which it is generally sold in the wholesale market
The principle behind this is in order for manufacture to be taxable article must become goods
In order to become goods these must come to the market or be capable of coming to the market as definite and identifiable goods
So whatever expenses are necessary for making that possible that much of the cost would be included in the value
But what is subsequent to that that is to say any cost merely facilitating transport or merely ensuring security in transit are costs which are post manufacture ie after articles have become goods as a result of manufacture and are capable of becoming manufac tured and thereafter dealt with
This in my opinion is the true test and read in that light I do not find that there is really any divergence of opinion between Bhagwati C J Pathak J and Sen J of course there is divergence of emphasis in the approach in which the question has to be looked into
This aspect of the matter was also dealt with by this Court in Ms Hindustan Polymers vs The Collector of Central Excise Appeals Nos
4339 41 of 1986 judgment in 489 which was delivered on 23rd August 1989 where one of us Sabyasachi Mukharji J after analysing these several cases of this Court observed that 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 comes into being which is known as such in the market
If in order to be able to put it in 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 cost of such wrapper or container or drum must be included in the assessable value and if the price at which the goods are sold does not include that value then it must be so included by the very force of the terms of the section Therefore in all cases according to that decision the question must be examined whether packing and if so what packing is necessary to make the article marketable as such or could these goods be sold without the containers drums or packing This Court in that case took into account the fact that 90 of the goods were delivered in tankers belong ing to the assessee and only 10 of the goods were in packed condition at the time of removal
This was taken as an indicia of in what condition of packing the goods are sold
As mentioned hereinbefore that principle has been clearly laid down in the Bombay Tyres International s case supra in the sense that only that degree of secondary packing which is necessary for putting the assessable article in the condition in which it is generally sold in the wholesale market should be included in the value  of the article
The majority judgment in Godfrey Philips  case supra also clarified this position
It is true that Pathak J and Sen J made it clear that secondary packing does for the purpose of facilitating transport and smooth transit of the goods to be delivered to the buyer in the wholesale trade would not be included in the value
Chief Justice Bhagwati held in the said case that the fibre board containers in which the cigarettes were packed fell within the definition of packing  in the Explanation to section 44di and if these formed part of the packing in which the goods were packed when delivered at the time of removal then such cost of corrugated fibre board containers would be liable to be included in the value of cigarettes
But Chief Justice emphasised that the test to determine whether the cost 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 condition in which they 490 are generally sold in the wholesale market at the factory gate
In my opinion the views expressed by the majority of the Judges in Godfrey Philips  case supra were in conso nance with the view of the this Court in the Bombay Tyres International s case supra
The question is not for what purpose a particular kind of packing is done but the test is whether a particular packing is done in order to put the goods in the condition in which they are generally sold in the wholesale market at the factory gate and if they are generally sold in the wholesale market at the factory gate in 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
In the present case it has been factually found as indicated hereinbefore by the Collector that the talcum powder and face powder are packed either in metal containers or in plastic containers and thereafter they are put in dozen packing also of cardboard packings which are inner cartons and contain one dozen
The same are then put in the master carton for purpose of delivery to wholesale dealers
But in Godfrey Philips  case supra the corrugated fibre board containers were employed for the purpose of avoiding damage or injury during transit
On the other hand in this case it was found that there was no damage or injury to the tins or plastic containers employed as a primary packing even if the goods are transported without the outer packing
The second point is that cigarettes are sold in cartons of 200 cigarettes each even in wholesale trade
That is not the case in the appellants  wholesale trade herein where the goods are sold by number of dozens and in some cases by numbers of tins or other packings which are primary packing
Therefore it cannot be said that the outer cartons are employed only for the purpose of avoiding damage or injury to the goods during transit
But it may be indicative of the fact that the goods are so sold
It may be mentioned in this connection that our atten tion was drawn to the unanimous order of three Judge Bench presided over by the Chief Justice Bhagwati of this Court in Civil Appeals Nos
642 45 of 1982 in Geep Industrial Syndi cate Ltd vs The Union of India  Ors
There the question that arose for determination was whether the cost of second ary packing in wooden boxes was liable to be added in deter mination of the value of batteries and torches for the purpose of excise duty
The torches and batteries manufac tured by the appellants were first packed in polythene boxes and then these polythene boxes were placed in cardboard cartons
There were certain varieties of batteries which were packed directly in cardboard cartons
There was 491 no doubt that packing in polythene bags and cardboard car tons was includible in the determination of the value of batteries and torches for the purpose of levy of excise duty
The question was whether the wooden boxes in which the cardboard cartons were placed at the time of delivery at the factory gate was to be includible in the value
There was some dispute between the parties whether the cardboard cartons were packed in wooden boxes in all cases
It was stated that when they were delivered in the course of the wholesale trade at the factory gate they were not packed in wooden boxes as a matter of course but they were packed in wooden boxes only in those cases where delivery was taken by wholesale dealers outside the city of Allahabad in that case
This Court found that it was not necessary to deter mine the disputed question of fact
It was held that even if the cardboard cartons were packed in wooden boxes in all cases it was clear that the cost of such secondary packing in wooden boxes was not includible in determination of the value of batteries and torches
This Court agreed with the Godfrey Philips s case supra that corrugated fibreboard containers were used as secondary packing only in order to ensure cartons or outers against injury or damage during transport and that it was not necessary for putting the cigarettes in the corrugated fibreboard containers for their sale in the wholesale market at the factory gate and the cost of such secondary packing was therefore not liable to be included in determination of the value of the cigarettes for the purpose of excise duty
The Tribunal in the instant case observed as under We observe that in the facts of the present case the rationale of the judgment of the Hon ble Supreme Court above is squarely ap plicable
We hold following with respect to the ratio of the decision above that the cost of the outer or bigger carton in which the small cartons containing the powder tins are packed is not includable in the assessable value as the delivery of the goods can be taken in smaller cartons at the factory gate by a buyer in the course of wholesale trade
The outer carton have to be held to be for the purpose of transport of the goods and are not required for the sale of the goods at the factory gate emphasis supplied
In my opinion the correct position seems to be that the cost of that much of packings be they primary or secondary which are required to make the articles marketable would be includible in the 492 value
How much packing is necessary to make the goods marketable is a question of fact to be determined by appli cation of the correct approach
Packing which is primarily done or mainly done for protecting the goods and not for making the goods marketable should not be included
In the instant case therefore could the powder be sold in smaller cartons at the wholesale market The fact that these were usually sold in the wholesale market would be a good pointer for this question
Having considered the order of the Tribu nal which I have set out hereinbefore I am of the opinion that the Tribunal was in error in approaching the problem before it by looking at the question whether the goods packed in the smaller cartons could be sold in a wholesale market in the course of wholesale trade at the factory gate without the outer cartons in which the smaller cartons are packed
The question is not whether these goods could be so sold but the question is whether these goods are so sold usually and as such used to become marketable in such man ner
In my opinion there has been a misdirection by the Tribunal on this aspect of the matter
If the above be the true test then the judgment and the order of the Tribunal must be set aside and the appeal must be allowed and the matter remanded back to the Tribunal to determine afresh this question from the stand point indicated above
I accordingly allow the appeal set aside the judgment and order of the Tribunal and remand the matter back to the Tribunal to decide it in accordance with the aforesaid directions
In the facts and the circumstances of the case there will be no orders as to costs
RANGANATHAN J I agree
But as it has been contended by Sri Soli Sorabjee that the Tribunal s conclusion in this case has to be upheld straightaway in view of the decision of this Court in Godfrey Philips 1985 Suppl
3 SCR 123 and Geep CA Nos
642 45 of 1982 I should like to add a few words
section 44di of the Act lays down that where goods are delivered at the factory gate in a packed condition the cost of the packing should be included in the assessable value
The clause makes no distinction between primary packing and secondary or further subsequent packing
Howev er a restriction was read into the wide language of the clause by this Court in the Bombay Tyre International case  Posing the question whether the cost of all packing no matter to what degree in which the whole sale dealer takes delivery of the goods should be included in determining the assessable value or a line should be drawn somewhere the Court indicated that while the 493 cost of primary packing was indisputably includible the position would be different in regard to secondary packing
The Court observed that the degree of secondary packing which is necessary for putting the excisable article in the condition in which it is generally sold in the wholesale market at the factory gate is the degree of packing whose cost can be included in the value of the article for the purpose of the excise levy
If any special secondary pack ing is provided by the assessee the Court observed at the instance of a wholesale buyer which is not generally provided as a normal feature of the wholesale trade the cost of such packing shall be deducted from the wholesale cash price The exclusion indicated by these words is very limited and clearly does not extend to the cost of any packing in which the goods are generally sold by the manu facturer in the wholesale market
However the reference in Bombay Tyres supra to secondary packing which is necessary led to a further refinement in Godfrey Philips and Geep
In these cases the conclusion of the Court was that the cost of packing of the goods in corrugated fibre containers and wooden boxes respectively was not includible in arriving at the assessa ble value
Had the matter been free from authority one might have been inclined to agree with the reasoning of Bhagwati CJ that the condition of packing in which the goods are usually placed in the wholesale market would be conclusive of the issue and that the condition in which the goods are generally placed in the wholesale market notwith standing a theoretical enquiry by the excise authorities into the purpose of such packing or as to whether such packing was necessary or not would be totally uncalled for
Indeed this was the test applied by one of us Muk harji J in Hindustan Polymers for holding that the cost of drums for packing fusel oil was not includible in the assessable value because the goods viz fusel oil was gener ally sold in the wholesale market in the raw state without any packing whatever leaving it to the wholesale consumer to draw it from the manufacturer s tanks into his trucks containers or drums
It will be appreciated that if this position were not to be accepted and an enquiry were to be made as to whether such general packing is necessary or not such an investigation might operate both ways
For example on that basis it could be argued in the Hindustan Polymers case that though the goods were actually sold wholesale in a free condition a container is necessary from a theoretical stand point to place the fluid goods on the market and that therefore the cost of the drums would have to be included in the assessable value
But this was not the view taken by this Court
There is therefore much to be said for the view that in judging the condition of packing whose cost is to be included in the 494 assessable value one should go by the conduct of the par ties and the nature of the packing in which the goods gener ally are not can be placed in the wholesale market
It is however urged for the respondent that such an enquiry has been held necessary by Godfrey Philips
But as pointed out by my learned brother even the majority deci sion in that case does not go to the length suggested on behalf of the appellant and justify an investigation as to the state of packing in which the goods could be placed in the market
That would only be an exercise in theoretical speculation
On that basis for instance in the present case it could be said for the same reasons as have been given by the Tribunal that the goods could be collected from the factory even in units of tin containers leaving it free to the purchasers to make their own arrangements to pack them in cardboard cartons to convey them to their place of business
This would render even the cost of the first outer packing of cardboard containers irrelevant in the determination of the assessable value
That was not the contention even of the respondents and indeed if carried to its logical conclusion would render the cost of all pack ing other than primary packing excludible from the assess able value
It seems to me therefore that what is to be really seen is this What is the condition of packing con sidered by the manufacturers having regard to the nature of the business the type of goods concerned the unit of sale in the wholesale market and other relevant considerations to be generally necessary for placing the goods for sale in the wholesale market at the factory gate
In Godfrey Philips and Geep this Court was concerned with a special type of packing which seemed intended more to protect the packed goods against injury or damage rather than to enable it being placed on the market
Indeed in Godfrey Philips this was a factual position that had been accepted by the depart mental authorities earlier for a period of a little over six years which they later wanted to go back upon
Can the same be said of the goods and the packing with which we are concerned here is a question to be decided on the facts as the appellate controller did and not as a proposition of law settled by or the automatic consequence of the decision in the Godfrey Philips case as seems to have been done by the Tribunal and as is being argued for the respondents
I would therefore agree that the matter should be remanded to be reconsidered in the light of our observations
Y Lal Appeals allowed


Summary:
Rule 64 Order XXI CPC empowers the Court executing a decree to bring to sale any property attached by it or such portion thereof as may seem necessary to satisfy the decree
The appellant s land measuring 10 acres was brought to court sale in execution of a decree
The respondent purchased the land for Rs 17000
The sale was subject to a prior mort gage for Rs2000
The appellant s application under Order XXI Rule 90 for setting aside the sale was rejected by the executing court on the ground that the sale was not vitiated by fraud or irregularity
The appeal against the order was dismissed by the Subordinate Judge
Before the appellate court the con tention taken on behalf of the appellant was that the exe cuting court ought to have sold only such portion of the land as would satisfy the decretal dues and the sale of the entire 10 acres was illegal and without authority
The court rejected that contention on the ground that it was a single piece of land and could not have been divided into parcels
The High Court also dismissed the revision
Allowing the appeal by special leave HELD In all execution proceedings the court has to first decide whether it is necessary to bring the entire attached property to sale or such portion thereof as may seem necessary to satisfy the decree
If the property is large and the decree to be satisfied is small the court must bring only such portion of the property to sale the proceeds of which would be sufficient to satisfy the claim of the decree holder
It is a mandate of the legislature which cannot be ignored
Any sale held without examining this aspect and not in conformity with this requirement would thus be illegal and without jurisdiction
453H In the instant case the amount claimed in the execution petition was about Rs2400
To realize that amount the land measuring 10 acres was sold for Rs17000
The land is not indivisible
Nor division is impracticable or undesirable
Out of 10 acres the court could have conveniently demarcat ed a portion and sold it
454E F The sale must therefore be set aside being in contra vention of the provision of Rule 64 Order XXI CPC
454H Takkaseela Pedda Subba Reddy vs Pujari Padmavathamma  Ors at 340 referred to