ORDER G. P. Singh, C. J. 1. This order shall also dispose of Misc. Petition No. 704 of 1976. 2. The petitioners in both these petition are manufacturers of Portland Cement. The point in dispute in these petitions is whether for the period from 1st October 1975 to 8th January 1976 cost of packing in gunny bags could be included in the value for charging excise duty on cement under section 4 (4) (d) (i) of the Central Excises and Salt Act, 1944. 3. Section 4 in the present shape in the Act was inserted by Act No. 22 of 1973 and came into force on 1st October 1975. Section 4 (1) of the Act makes the duty of excise chargeable with reference to the value of excisable goods. Section 4 (4) (d) (i) provides that the value in relation to any excisable goods '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.' By notification dated 9th January 1976 issued under rule 8 (1) of the Rules made under the Act, the Central Government exempted grey Proland Cement from so much of the duty as is equivalent to the duty leviable with reference to that part of the value thereof which represent the cost of packing in which such cement is delivered at the time of removal from the factory. Thus from 9th January 1976, cost of packing is not included in the value of cement for charging excise duty. It may here be mentioned that cement of all varieties falls under Item 23 of First Schedule to the Act and the duty payable is 35 per cent advalorem. 4. In Misc. Petition No. 363 of 1976 the Assistant Collector. Central Excise, Jabalpur, by orders dated 12th February, 1976, and 20th February 1976 rejected the petitioner's contention that the cost of packing should not be included in the value of cement for purposes of excise duty. The petitioner paid the duty also on that part of the value which represented that cost of packing under protest for the period from 1st November 1975 to 8th January 1976. The petitioner paid the duty also on that part of the value which represented that cost of packing under protest for the period from 1st November 1975 to 8th January 1976. The petitioner in pursuance of an interim order of this Court furnished bank guarantee for payment of duty on so much of the value as represented the cost of packing for the period from 1st October 1975 to 31st October 1975. 5. The petitioner in Misc. Petition No 704 of 1976 also contended that the cost of packing ought not to be included in the value for purposes of charging excise duty on cement. This contention was negatived by the Assistant Collector, Central Excise, Raipur, by order Annexure 'D' and by' the Appellate Collector, Central Excise, New Delhi by order Annexure 'E'. The petitioner has paid the duty also on that part of the value which represented the cost of packing under protest for the period from 30th October 1975 to 8th January 1976. The petitioner has not paid' any such duty for the period from 1st October, 1975 to 29th October, 1975. 6. Learned counsel appearing for the petitioners first contends that section 4 (4) (d) (i) of the Act in so far as it provides for inclusion in the value the cost of packing is ultra vires and void on the reasoning that packing is not embraced in manufacture or production and excise duty can be levied only on goods manufactured or produced in India. The second contention of the learned counsel is that even assuming that section 4 (4) (d) (i) is valid, the case of the petitioners falls within the exception, as the bags in which the cement sold is packed are durable and returnable by the buyer. The learned Standing Counsel for the respondents in reply submitted that packing is a process incidental or ancillary to the completion of the manufactured product cement and falls within the definition of "manufacture" as contained in section 2(f) of the Act, and that the gunny bags in which the cement was sold were not returnable and there was no material to show that they were actually returned. It was further submitted that in any case the petitioners were not entitled to refund. 7. It was further submitted that in any case the petitioners were not entitled to refund. 7. We do not think it necessary to consider the question whether section 4(4) (d) (i) is valid for, in our opinion, the petitioner's case did fall within the exception contained therein. We have already made a reference to this provision which says that if goods are delivered at the time of removal in a packed condition, the cost of packing is to be included in the value "except the cost of the packing which is of a durable nature and is returnable by the buyer to the assessee." The petitioners claim the benefit of this exception. Cement is a controlled commodity Sale and disposal of cement by the manufacturers is completely regulated by the Cement Control Order, 1967. Clause 4 of the Order empowers the Central Government to direct any producer to sell cement to such person or class of persons or to transport cement to such destination, and on such terms and conditions as may be specified in its order. Clause 5 of the order which controls the price enables the Central Government to fix charges for packing. The price of cement was fixed by the Government of India (Ministry of Industry and Civil Supplies) by order dated 1st October 1975. This order is Annexure B in Misc. Petition No. 704 of 1976. It is stated therein that the charges for packing one metric tonne of cement in 20 new as well as old bags in the ratio of 50 and 50 per cent respectively for the period from 1st October 1975 to 31st December 1975 will be Rs. 40.98. It is further mentioned therein that the serviceable second-hand jute bags may be collected by the Bag Collecting Agents of the respective cement factories and the resale price for the period from 1st October 1975 to 31st December, 1975 for 100 bags would be Rs. 92.54. Annexure A in Misc. Petition No. 363 of 1976 is a specimen authorisation issued by the Cement Controller to the manufacturers and purchasers requiring sale and purchase of cement. This mentions a number of conditions and at the bottom there is a direction to the purchasers "please preserve empty cement bags in serviceable condition and return them to the factory of origin or its collecting agent on payment." Annexure B in Misc. This mentions a number of conditions and at the bottom there is a direction to the purchasers "please preserve empty cement bags in serviceable condition and return them to the factory of origin or its collecting agent on payment." Annexure B in Misc. Petition No. 363 of 1976 is a specimen of invoice or challan issued by the petitioner which contains a note to the effect "bags are returnable to us or to our Agent at the rate fixed by the Government from time to time." Annexure C in Mice. Petition No. 363 of 1976 is a circular issued by the petitioner to all stockiest and direct consumers that the gunny bags packing in which cement is delivered is on returnable basis. There is a request in this circular to the purchasers to return the cement bags in which it is delivered. It is pointed out that in case the bags are not returned, packing charges at the rate of Rs. 4098 per tonne would be charged. The Director General of Supplies and Disposals, New Delhi. issued a letter dated 17th April 1976 to all Cement Rate Contract holding firms (Annexure C in Misc. Petition No. 704 of 1976 of 1976) which shows that the packing materials was returned by the buyers for use again and again by the cement factories. It was for this reason that the Directorate refused to pay excise duty on the cost of packing as part of price of cement and advised the cement factories to claim round from excise authorities. 8. In the impugned orders of the Assistant Collector in Misc. Petition No. 363 of 1976 the benefit of exception is not given to the petitioner on the ground that it is not ascertainable at the time of assessment and clearance whether the same packing material is returned to the assessee and the cost is refunded. In Misc. Petition No. 704 of 1976 the benefit of exception was disallowed on the ground that though gunny bags are of durable nature, they are not returnable by the buyer to the party who collects them from open market through their authorised agent. 9. The benefit or exception under section 4 (4) (d) (i) is allowable: (i) if the packing is of a durable nature and (ii) if it is returnable by the buyer to the assessee. 9. The benefit or exception under section 4 (4) (d) (i) is allowable: (i) if the packing is of a durable nature and (ii) if it is returnable by the buyer to the assessee. The packing in the cases before us consisted of gunny bag which is of a durable nature. The first condition, therefore, is satisfied. As regards the second condition it has to be taken notice of that it is not necessary for getting the benefit of the exception that the packing must actually be returned. What is necessary is only that packing should be returnable by the buyer which only means that the buyer if he so likes can return the packing under the terms of sale obliging the seller to give refund or adjustment of the packing charges or to pay resale value of the packing returned. The price fixation under the Cement Control Order (Annexure-B) in Misc. Petition No. 704 of 1976) as already seen proceeds on the assumption that the cement will be packed in old and new bags in the ratio of 50 and 50 per cent and that the bags will be collected by the cement factories through their bag collecting agents from the purchasers on payment of price mentioned therein. The authorisation issued by the Cement Controller for sale and purchase of cement also directs the purchasers to preserve the empty cement bags in serviceable condition and to return them to the factory of its origin or to the collecting agents. The directions contained in the price fixation order and the authorisation are binding as the factories and the purchasers as they have statutory sanction of the Cement Control Order and the parties are bound by them in the same manner as by terms mutually agreed. Under these directions the purchasers have the right to return the bags in serviceable condition to the factories directly or through their collecting agents and to get refund or adjustment of the packing charges or payment of the value of the packing returned. Thus these directions make the packing returnable by the buyer to the assessee within the meaning of section 4 (4) (d) (i). This conclusion is further supported by the invoice (Annexure B), Circular (Annexure C) in Misc. Petition No. 363 of 1976 and the letter of the Director General of Supplies and Disposals (Annexure C) in Misc. Petition No. 704 of 1976. This conclusion is further supported by the invoice (Annexure B), Circular (Annexure C) in Misc. Petition No. 363 of 1976 and the letter of the Director General of Supplies and Disposals (Annexure C) in Misc. Petition No. 704 of 1976. The reasoning of the Assistant Collector in denying the benefit of the exception to the petitioner in Misc Petition No. 363 of 1976 is that it is not ascertainable at the time of assessment and clearance whether the same packing material is returned and the cost is refunded. This reasoning is apparently erroneous as it proceeds on a wrong construction of the words of exception in section 4 (4) (d) (i). As already seen it is not necessary to get the benefit of the exception for the assessee to show that the packing material has been returned or the cast of packing has been refunded. Indeed this is impossible to show at the stage of removal. All that is necessary is to show that the packing is returnable by the buyer to the assessee under the terms of sale. The question of actual return is entirely irrelevant. Similarly the benefit of exception was wrongly denied in Misc. Petition No. 704 of 1976 on the ground that it is the petitioner who collects the packing from open market through its authorised agent. The practice of the factories to appoint conection agents for conection of bags is only a convenient mode of giving effect to the term that packing is returnable. It does not mean that the purchase" cannot otherwise return the packing if he so likes. We, therefore, hold that the petitioners in both these petitions were entitled to the benefit of exception contained in section 4 (4) (d) (i). 10. The argument of the learned Standing Counsel for the respondents that the petitioners are in no case entitled to refund is not acceptable. It is not disputed that the duty on the cost of packing was paid by the petitioners under protest. If the petitioners are not liable to pay duty, they are also not liable to recover it from the parties to whom they sold the cement. 'The purchasers from the petitioners are entitled to recover that amount from them. The learned Standing Counsel for the respondents relied upon a judgment of the Bombay High Court in Ogale Glass Works Ltd. v. Union of India and others. 'The purchasers from the petitioners are entitled to recover that amount from them. The learned Standing Counsel for the respondents relied upon a judgment of the Bombay High Court in Ogale Glass Works Ltd. v. Union of India and others. 1979 ELT 468, in support of his submission that justice does not lie on the side of the petitioners in seeking refund. It does not appear whether in that case the petitioner had paid the duty under protest. When the petitioners in the instant case had paid the duty under protest and when the purchasers from them can claim recovery of the amount of duty which they may have paid as price to the petitioners, we fail to understand why justice does not lie in directing refund of that amount to the petitioners from the Government. 11. The petitions are allowed. We declare that for the period from 1st October 1975 to 8th January 1976 the cost of packing was not includible in the value of cement for purposes of excise duty. The petitioner in Misc. Petition No. 363 of 1976 is entitled to the refund of the duty paid on the cost of packing for the period from 1st November 1975 to 8th January 1976 from the respondents and any demand for such duty for the period from 1st October 1975 to 31st October 1975 is quashed. In Misc. Petition No. 704 of 1976 the petitioner is entitled to refund of duty paid on the cost of packing for the period from 30th October 1975 to 8th January 1976. The demand for duty on the cost of packing for the period from 1st October 1975 to 29th October 1975 is quashed. There will be no order as to costs of both the petitions. The security amount in both the petitions be refunded to the petitioners.