ORDER [ENTITY], J.
1. The three writ petitions listed above raise a common question of law, and may therefore be disposed of by a common judgment. The question of law requiring decision is whether the definition of "value", as given in [SECTION] of the [ACT], which makes the cost of packing of excisable goods, deliverable at the factory gate, except the cost of packing which is of a durable nature and is returnable by the buyer to the assessee, includible in the value of such goods for purposes of levy of duty of excise thereon, is ultra vires the [ACT] and also con- travenes [SECTION] of the said Act. It has arisen in the following circumstances.
2. The [ACT], (hereinafter to be referred to as the Act) which consolidated and amended the law relating to Central duties of excise and to salt came into force on February 28, 1944. [SECTION] of the Act which makes provision for levy of duties of excise lays down that such duties shall be levied and collected on all excisable goods other than salt produced or manufactured in India in such manner as may be prescribed and at the rate set forth in the First Schedule. "Vegetable product" is one of excisable goods specified as such in [SECTION]. "Vegetable Product" as defined therein means any vegetable oil or fat which has, by hydro- genation or by any other process, been hardened for human consumption. "Vegetable product" is chargeable with duty at the rate of ten per cent ad valorem. [SECTION] of the Act which deals with valuation of excisable goods for purposes of charging duty of excise was amended with effect from October 1, 1975. The amended section lays down, inter alia, that where duty of excise is chargeable with reference to value, such value shall, subject to other provisions of the section, be deemed to be the normal price thereof, that is to say, the price at which such goods are ordinarily sold by the assessee to a buyer in the course of wholesale trade for delivery at the factory gate. [SECTION] defines "Value" as under :
4(4)(d)-"Value" in relation to any excisable goods-
(i) Where the goods are delivered at the time of removal in a packed condition, includes the cost of such packing except the cost 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, container, bobbin, pirn, spool, reel or warp or any other thing in which or on which the excisable goods are wrapped, contained or wound.
(ii) does not include the amount of the duty of excise, sales-tax and other taxes, if any, payable on such goods and, subject to such rules, as may be made, the trade discount (such discount not being refundable on any account whatsoever) allowed in accordance with the normal practice of the wholesale trade at the time of removal in respect of such goods sold or contracted for sale.
3. The petitioner, M/s Ramnugar Cane and Sugar Company Ltd. is a manufacturer of vegetable products having its factory in Jhotwara, Jaipur. The vegetable products are marketed by the petitioner in tin containers under the brand names of "Maharaja", "Veena", "Raman" and "Ladla". The petitioner has been paying duty of excise on these products on a valuation including the cost of containers. Its case is that such payments were made erro- neously, and that, in law, cost of packing is not includible in the value of excisable goods for purposes of charging duty of excise. It filed writ petition ([CASE NUMBER]) challenging the constitutionality and legality of the definition of "value" given in [SECTION] and repro- duced above. The petitioner avers that [SECTION] of the Act, especially its sub-Clause (i) is "ultra vires the [ACT] and in contravention of the said Act (i.e , the [ACT])". It further avers that according to [SECTION] of the Act, which it referred to as "charging Section", read with [SECTION], duty of excise is chargeable on "vegetable product", and that since tin containers in which the vegetable product is marketed are not the same thing as vegetable product, no duty is chargeable on the tin containers under [SECTION] which is described by the petitioner as the "machinery section" and which makes pro- vision for the cost of packing to be included in the value of excisable goods is challenged on the ground that it contravenes the charging section i.e. [SECTION]. Another ground of challenge to this section is that if allowed to stand it would be tantamount to allowing Parliament to levy tax on the sale or purchase of tin containers, for, it is further alleged, the petitioner does not manufacture the tin containers and instead purchases them from the market for filling them with vegetable product and marketing such product in that manner. It is contended that since the petitioner does not manu- facture the tin containers, the duty levied on the cost of such containers cannot legitimately be described as duty of excise within the ambit of [SECTION] of the [ACT]. It is further contended that the real character of such duty is no different from a tax on sale or purchase of such containers which is a subject exclusively reserved by [SECTION] of the [ACT] for Legislation by a State Legislature.
4. It is on these averments that the petitioner prays in this writ petition ([CASE NUMBER]) for a declaration to the effect that [SECTION] of the Act which widens the concept of value of excisable goods so as to include the cost of packing is ultra-vires the [ACT] and the Act, for injunction res- training the respondents from levying and collecting duty of excise on cost of packing of vegetable product to be marketed by the petitioner and for refund of the amount already levied and collected in that behalf since October 1, 1975.
5. The petitioner filed another writ petition ([CASE NUMBER]) a few months after the institution of the aforementioned writ petition in respect of the same subject matter. The occasion to file the second writ petition arose because, according to the petitioner the excise authorities refused to exclude the cost of containers from the value of its vegetable products for purpose of charging duty of excise notwithstanding the fact that the petitioner began to market such products with effect from June 16, 1981, on the condition that the containers are of a durable nature and returnable by the buyer to the petitioner.
6. The third writ petition on hand ([CASE NUMBER]) was filed by M/s. [ENTITY] on February 8, 1982. The petitioner, M/s. [ENTITY], is also a public limited company, incorporated under the [ACT]. One of the factories of the petitioner, situated at Durgapura, Jaipur, manufactures vegetable products (vanaspati) which are marketed by the petitioner under registered trade marks "Ashoka" "Hanuman" and "Lagan", in tin containers of the capacity of 16.5 Kg., 4 Kg. and 2 Kg., and polythene containers of the capacity of 4 Kg., 2 Kg. and 1 Kg. Having regard to the fluctuations in the market price of vegetable products, the Collector, Central Excise Jaipur, allowed the petitioner to declare the price of the goods transacted on the gate pass, and to determine the duty payable on such goods on the basis of the declared price, in accordance with the provisions of [SECTION], [ACT]. Till October, 1979, the petitioner kept including the cost of tin and polythene containers in the declared price of its vegetable products, and paying duty on that basis. On October 5, 1979, the petitioner made a re- presentation (Annexure 1) to the Assistant Collector Central Excise, Jaipur, stating that according to recent rulings of some of the High Courts in the country cost of packing is not includible in the value of excisable goods for determining the duty payable on such goods and that therefore the petitioner would stop including such cost in the value of the vegetable products to be declared in the gate-pass with effect from October 9, 1979. The excise authorities did not accept the contention of the petitioner and advised it to continue including the cost of containers in the value of its vegetable products as it had been doing in the past. The petitioner stuck to its earlier position, but continued to pay, under protest, the requisite duty on its vegetable products inclusive of the cost of containers as before. The matter came to a head on January 5, 1982, when the petitioner began to exclude the cost of containers from the declared price in the gate-pass, and thus refused to pay duty on the cost-of-packing component of its vegetable products. The Assistant Collector Central Excise, Jaipur, visited the petitioner's factory on January 27, 1982, and made a direction in writing requiring the petitioner to pay duty on its vegetable products including the cost of containers. The petitioner again paid such duty under protest and filed the present writ petition claiming a refund of the entire amount, paid by him from time to time since October 1, 1975, as duty on the cost-of-packing component of the value of its vegetable products and further praying for an injunction restraining the Collectorate of Central Excise Jaipur and the Union of India from levying and collecting duty in future on the cost-of-packing component of the vegetable products to be manu- factured and marketed by it. The grounds on which the levy of duty of excise on containers is challenged by the petitioner are similar to the grounds on which such levy is challenged in the two connected petitions. The said grounds have already been stated above and need not therefore be repeated here.
7. The petitioner also made a relatively minor grievance in respect of the alleged demand on it by the excise authorities to pay excise duty on the freight and distribution expenses of its vegetable products. Mr. [ENTITY], learned counsel for the respondents however stated that duty of excise will be charged to the petitioner only on the value of its vegetable products including the cost of packing and that all costs incurred by the petitioner after the goods leave its factory gate, like freight and distribution expenses, have not been charged in the past, and will not be charged in future, with excise duty. We need not therefore dilate on the petitioners grievance regarding the alleged demand of the respondents for payment of duty on freight and distribution expenses.
8. Another controversy of a minor nature relates to the contention, raised in all the three petitions, to the effect that tin containers in which their respective vegetable products are marketed by the petitioners are of a durable nature and are returnable by the buyers to the petitioners and that, therefore, even according to [SECTION] of the Act, assuming the same is constitu- tional and valid, cost of such containers is not includible in the valuation of the vegetable products delivered to the wholesale buyers at the factory gate. The question whether tin containers and polythene containers of the capaci- ties ranging between 1 kg. and 16.5 kg. are of a durable nature and are return- able by the buyer to the petitioners is obviously a question of fact which should be left open to be decided by the Central Excise authorities under the Act after hearing both sides. We would however like to observe that ordinarily tin containers and polythene containers of small capacities like 1 kg., 2 kg., 4 kg. and 16.5 kg. are not by their very nature durable and are seldom returnable by the buyer to the manufacturer. Such small-sized containers are prima facie intended to serve diverse functions like facilitating ready measure- ments, labelling of brand names printing or inscribing sale-promotion material on the labels or the containers themselves, prevention of physical deterioration, theft, adulteration or substitution in transit till the vegetable product reaches the consumers. If the vegetable product were to be sent out from the factories con- tained in big galvanised-steel drums, one should normally be willing to accept that such drums are of a durable nature and if they are returnable by the wholesale buyers to the manufacturer their cost cannot be included in the value of the vegetable product for purpose of charging duty of excise. There is however, all the difference between big galvanised-steel drums on one side and small polythene containers and tin containers on the other. Having said all this, we would once again utter the caveat that the question whether the containers involved in these writ petitions are of a durable nature and returnable should be decided by the Central authorities concerned on the basis of evidence pro- duced before them and without letting our tentative observations influence their judgment.
9. This brings us to the main question which falls for determination in these writ petitions. As already stated, the question is whether the definition of "value", as given in [SECTION] of the Act, which makes the cost of packing of excisable goods deliverable at the factory gate, except the cost of packing which is of a durable nature and is returnable by the buyer to the assessee, includible in the value of such goods for purposes of levy of excise duty thereon, is ultra vires the [ACT] and also contravenes [SECTION] of the Act. It will be convenient to first deal with the argument to the effect that the definition is void inasmuch as it contravenes, the provisions of [SECTION] of the Act. The argument in a nut-shell is that [SECTION] which, according to counsel, is the "charging Section" read with [SECTION], provides for levy of duty of excise on "vegetable products" at the rate of 10 per cent ad valorem and that [SECTION] which is said to be the "machinery section" cannot be so read as to treat an article like containers as part and parcel of "vegetable products" for valuation of such products for purposes of levy of duty of excise. It is contended that according to [SECTION], it is only "vegetable products" which are subject to duty of excise at the rate of 10 per cent ad valorem and not their packing and that therefore it would amount to a contravention of [SECTION] if "packing" were to be subjected to such duty by including the cost of packing in the value of the vegetable product.
10. We have carefully considered this argument and find no merit in it. In [PRECEDENT] the Privy Council explained that a duty of excise is primarily a duty levied upon the manufacturer or producer in respect of the commodity manufactured or produced, and that it is a tax upon goods, not upon sales or the proceeds of sale of goods. The value of the goods for the purpose of excise "must take into account only the manufacturing cost and manufacturing profit and must not be loaded with post-manufacturing operations". (See [PRECEDENT].
11. Now, the point to see is as to whether the manufacture of "vege- table product" within the purview of [SECTION] is complete with the manufacture and hydrogenation of vegetable oil or fat, or, whether such manufacture requires any further processing to produce the goods known to the consumer as vegetable product or vanaspati. A bare perusal of the definition of "vegetable product" as given in [SECTION] would at once show that since the legislature was dealing therein with human food, it could not have been oblivious of the essential requirement of process- ing of the vegetable product to make it fit for human consumption. "Vegetable product" which is made subject to duty of excise in [SECTION] is not merely vegetable oil or fat in its naked, raw and brute form in which it emerges immediately on hydrogenation. The Legislature requires something more and has therefore defined "vegetable product" to mean "any vegetable oil or fat which, whether by itself or in admixture with any other substance has by hydrogenation or by any other process been hardened for human consumption" (emphasis supplied). If the vegetable product which is subject to excise duty under [SECTION] is a good-stuff for human consumption-which the Legislature has taken care to emphasise it is- the conclusion is inescapable that canning such a product in containers of metal or polythene is an essential part of the processing to get it to the con- sumer or retailer in a quality fit for human consumption. If the manufacturer manufactures such containers or buys them from the market to can such vegetable product before delivery at the factory gate, he is obviously doing something which is essential to complete the manufacture of "vegetable product" for human consumption.
12. The definition of "manufacture" as given in [SECTION] of the Act also strengthens this conclusion, "Manufacture" as defined therein, "includes any process incidental or ancillary to the completion of a manufactured product ". We are of the considered opinion that canning vegetable oil or fat in hardened form is incidental or ancillary to the completion of manu- facture of the vegetable product to make it fit to reach the retailer or consumer in a consumable condition. The cost of such canning would therefore re- present an essential component of the value of the vegetable product (vanas- pati) for assessing the duty of excise. If the wholesaler supplies containers at his own cost to the manufacturer, it would be entirely a different matter, for in that case there will be no question of the inclusion of the cost of containers in the value of the product of the manufacturer.
13. It may be mentioned here that counsel for the petitioners read out to us all the clauses of the definition of "manufacture" to emphasise his point that if the legislature had intended to treat canning of vegetable products as a process incidental or ancillary to the completion of manufacture of such products, it would have added another clause to the existing eight clauses to make it clear that in relation to vegetable products "manufacture" would include the process of canning as well. We do not find any force in this argument. It will be seen that the definition of "manufacture" as given in [SECTION] is inclusive and that the eight clauses appended to the definition are merely illustrative and not exhaustive. That being so, it would be per- missible in a given case, not directly covered by any of the eight clauses, to ascertain whether packing, which includes containers, is a process incidental or ancillary to the completion of a manufactured product, and if so, it would be perfectly legal to include the cost of packing in the value of the excisable goods produced or manufactured by the assessee.
14. In [PRECEDENT] the Supreme Court took note of the fact that while the Act defines "excisable goods" to mean "goods specified in the First Schedule as being subject to duty of excise", it does not give any definition of "goods". It is therefore necessary to discover as to what the term "goods" really means. Their Lordships explained with reference to Words and Phrases (permanent Edition) and Webster that to become "goods", ah article must be something which can ordinarily come into the market to be bought and sold. We have already discussed that vegetable product (vanaspati) in these cases can only be marketed and indeed is being marketed in containers of different capacities. The petitioners have themselves pleaded that they are marketing their vegetable products under their respective brand names. Now, it is Simply inconceivable that a particular brand of vanaspati would be sent to the market for being bought and sold under its brand name without being contained in a container bearing the brand name inscribed on it or printed on the containers label. The very fact that the petitioners are marketing their products under their own brand names lends added assurance to the conclusion that the process of canning of vanaspati in metal or polythene containers by the petitioners before delivery of the manufactured product (vanaspati) at the factory gate is incidental or ancillary to the completion of the manufacture of vegetable product (vanaspati) to make it fit for human consumption. To put it in the language of the Supreme Court, "vegetable product" which is subjected to duty in [SECTION] read with [SECTION] of the Act is some- thing which can ordinarily come into the market to be bought and sold for human consumption. "Vegetable product" which the petitioners are manufac- turing and sending into the market through wholesalers is marketed in different brand names. For example their brands "Ladla" or "Hanuman" in the market do not merely mean vanaspati or bydrogenated oil simpliciter, but a particular brand of "goods" to be identified as such from its container or the label on the container. We have therefore no hesitation in holding that the "vegetable product" as manufactured by the petitioners consists of not merely the food-stuff, but also the container in which it is bought and sold. For purposes of levy of excise, it makes no difference whether the container is the manufactured by the petitioners or purchased from the market. In either case, the cost of the container incurred by the petitioners must be included in manufacturing cost of the vegetable product marketed by them in containers carrying their brand names. In this view of the matter, the definition of "value" given in [SECTION] of the Act which makes provision for the cost of packing to be included in the value of the excisable goods is, in no way, in conflict with [SECTION], for packing or canning is a process incidental or ancillary to the completion of manufacture of vegetable product, as manu- factured by the petitioners to produce the finished "goods" bought and sold in the market in their respective brand names.
15. Turning now to the other limb of the petitioners' argument that the definition of "value" in so far as it makes the cost of packing includible in the value of the excisable goods for purposes of excise is ultra vires the Constitu- tion, it is contended by the petitioners' learned counsel that since the petitioners do not manufacture the containers levy of duty on the cost of containers cannot legitimately be described as excise duty within the purview of [SECTION] of the [ACT]. It is further contended that since the petitioners purchase the containers from the open market levy of duty on the cost of the containers would be tantamount to a tax on their purchase by them which is a subject lying within the legislative field of [SECTION] of the [ACT] on which a State Legislature alone can legislate. Now, these arguments stand adequately answered in the discussion above relating to the alleged contravention of [SECTION] of the Act and the so called illegality of the latter by reason of such contravention. We have held above that the finished products (vanaspati) of the petitioners, bearing different brand names, come into being in the finished form only after the vanaspati is canned and labelled in containers of different capacities suitable for their marketing. In other words, canning of the petitioners vanaspati is a process incidental and ancillary to the completion of manufacture of these brands of vanaspati. The cost incurred by the petitioners in purchasing these containers is therefore a cost which is an essential com- ponent of the manufacturing cost of the petitioners' vegetable products. The containers cannot be viewed as goods independent of and separate from the vegetable product contained in them. They are marketed not as containers but as vanaspati tins of different weights and brands, and bought and sold in the market as such. We do not therefore find any force in the petitioners argument that canning of their respective vanaspati products does not form part of the process of manufacture of such vanaspati by them. By the same token, the petitioners' argument that cost of these containers is a post- manufacturing cost not includible in the value of their vegetable products is also wholly devoid of force. The arguments, based on [SECTION] of the [ACT] also there- fore fail.
16. We may mention here that a number of judgments of various High Courts, relating to the periods both before and after the impugned definition of "value" was inserted in [SECTION] of the Act, were cited before us by counsel on both sides in support of their conflicting contentions. We may straightaway point out that the Supreme Court is not shown to have decided, so far, as to whether the cost of containers of vegetables products in which such products are marketed by the assessee is includible in the manufacturing cost of the vegetable product. The case-law available from various High Courts, as will be presently seen, is in a state of flux. We may now briefly notice the said case- law.
17. Let us start with cases which seem to have taken a similar view as taken by us here. In [PRECEDENT], the Madras High Court dealt with the question of levy of excise on biscuits, covered by [SECTION], on which duty is payable at 10 per cent ad valorem. The court held that packing of biscuits in containers cannot be characterised as post-manufacturing operation so as to exclude their cost from the value of biscuits. The reason given for this opinion was that since biscuits require packing for their marketing, and since biscuits, in that case, were being delivered in containers at the factory gate, the value of containers will necessarily have to be included in the value of biscuits for levy of excise on biscuits.
18. Following its earlier judgment in [PRECEDENT] (supra), the Madras High Court once again held in [PRECEDENT]) that "manufacture" of eight products, involved in that case, including vanaspati, will, as the court put it, "take in also the process of putting them into metal containers for purpose of being pushed into the market as marketable commodities at the factory gate". It is significant to note that the assessee in the cited case also manufactured metal containers and had paid duty on containers under [SECTION]. An argument was raised on behalf of the assessee that since he had already paid duty on containers, he could not be made to suffer once again by asking him to pay duty on vanaspati inclusive of the cost of containers. The court rejected this argument observing that duty on contain- ers was paid on their manufacture under [SECTION] and that if the containers are again utilized for the purpose of finishing another product like vanaspati, necessarily the containers became part and parcel of 'another product and their cost is therefore includible in the assessable value of vanaspati under [SECTION] read with [SECTION] of the Act.
19. In [PRECEDENT], the Andhra Pradesh High Court drew a distinction between secondary packing and initial packing and held that the cost of display boxes in which dry batteries were packed and the cost of jute bags in which cement was packed could not be included as such packing constituted secondary pac- king. The judges however, made it clear that they should not be understood as laying down that in every case the cost of packing of excisable goods is liable to be excluded from the assessable value. Their Lordships emphasised the point that there are cases where without the initial packing of the excisable goods, such goods cannot be consumed or utilized and that in those cases the cost of initial packing necessarily forms part of the manufacturing cost of those excisable goods for purposes of levy of duty of excise.
20. In a judgment very recently handed down ([PRECEDENT] decided on February 4, 1982) (reported in [CASE NUMBER]) a Division Bench of the Allahabad High Court held that in view of definition of "value" as given in [SECTION] of the Act, all costs including the cost of packing which a manufacturer incurs for putting an article in a marketable condition so that it can be delivered at the factory gate to wholesale purchasers have to be included in the manufacturing costs. One of the cases relied on by the Division Bench in support of this view is another Division Bench judgment of the Allahabad High Court reported in [PRECEDENT].
21. The Bombay and Madhya Pradesh High Courts have taken a cont- rary view, holding that value of tin containers in which vegetable products are packed cannot be included in the assessable value of the vegetable products. In Union of India v. [ENTITY] Industries Pvt. Ltd., 1979 E.L.T. (J 158), which was decided on September 6, 1974, i.e., long before the definition of "value" as we find it now in [SECTION] of the Act was inserted by Parliament, the Bombay High Court rejected the argument that manufacture of vegetable product is not complete until it is packed in a tin container. We have carefully studied this judgment from the law report cited before us and find ourselves unable to endorse the reasoning which persuaded the Division Bench to reject the above argument. In any case, we are dealing here, in the instant cases not with vegetable products simpliciter in their naked form, but with vegetable products which are marketed under particular brand names. We cannot therefore apply the ratio of [ENTITY] to the facts of this case. We may also mention that relying on [ENTITY], the Bombay High Court has reaffirmed in [PRECEDENT] and in [PRECEDENT] its earlier view that the cost of containers is not includible in the assessable value of vegetable ghee for levy of excise. These judgments could not be of any more help to us that the judgment in [ENTITY] case.
22. The judgment of the Madhya Pradesh High Court reported in [PRECEDENT] stands in the same category as the two Bombay cases mentioned above, for the reasoning adopted in this case follows the line of reasoning of [ENTITY] which, with all respect, cannot be taken as the correct line.
23. Reference may also be made here to [PRECEDENT] in which a Division Bench of the Gujarat High Court took the view that where the manufacturer purchases the packing material from the market and packs the excisable goods in it, the cost of packing does not form part of the value of excisable goods because tax on them falls within entry 54 of the State list. It was on this view that the Gujarat High Court read down the definition of "value" as given in [SECTION] of the Act. We have already explained in the facts of the instant cases that inclu- sion of the cost of containers in the assessable value of the vegetable products of the petitioners does not encroach upon the legislative field of [SECTION] reserved exclusively for the State Legislation.
24. In conclusion, we hold that the definition of "value" as given in [SECTION] of the Act is perfectly constitutional and valid and that there- fore the cost of packing of excisable goods, which is necessary to put such goods in a marketable condition, is an integral part of the assessable value of such goods. In this view of the matter, the three writ petitions before us are without any merit. They are, therefore, dismissed leaving the parties to bear their own costs.