Excise valuation of yarn allows full sales tax deduction from sale price, ignoring input tax set-off.

For central excise valuation of yarn, the entire sales tax component in the sale price was treated as deductible in computing assessable value. The Tribunal's earlier ruling and the Board's circular were applied to hold that sales tax set-off availed on inputs does not reduce or curtail that deduction. The assessable value therefore excludes the full sales tax element, without adjustment for input tax credit or set-off.

---

---

Issues: Whether, while fixing the assessable value of yarn for central excise purposes, full deduction towards sales tax from the sale price was allowable and the sales tax set-off availed on inputs was to be ignored.

Analysis: The issue was treated as already settled by the Tribunal's earlier decision and by the Board's circular, both of which recognised that the entire sales tax component was deductible from the sale price for valuation purposes and that the set-off availed on inputs did not justify reducing that deduction.

Conclusion: Full deduction towards sales tax was allowable and the set-off was to be ignored; the appeal was decided in favour of the assessee.

Ratio Decidendi: For excise valuation, the deductible sales tax element is not curtailed by the assessee's input tax set-off, which is to be ignored while computing assessable value.

---