Excise valuation of waste and scrap requires exclusion of embedded duty from invoice price for assessable value.

For valuation of waste and scrap under Section 4(4)(d)(ii) of the Central Excise Act, 1944, the excise duty element embedded in the invoice price must be excluded to determine assessable value. The text notes that this position had already been settled by the Larger Bench and the Supreme Court, and applies it to sales of waste and scrap by the assessee. The assessee was therefore entitled to abatement of the duty component from the sale price, with consequential re-quantification of duty and refund of any excess paid. The appeal succeeded only on the valuation issue, leaving the remaining findings undisturbed.

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Issues: Whether the assessee was entitled to exclusion of the excise duty element from the invoice price for determining the assessable value of waste and scrap of paper under Section 4(4)(d)(ii) of the Central Excise Act, 1944.

Analysis: The goods were accepted as excisable, and the dispute was confined to valuation. The legal position on Section 4(4)(d)(ii) had been settled by the Larger Bench and by the Supreme Court, which recognised that the duty element embedded in the sale price is to be excluded while arriving at assessable value. That principle was held applicable to waste and scrap sold by the assessee, and the plea was treated as a legal one capable of being raised at the stage of appeal.

Conclusion: The assessee was held entitled to abatement of the duty element from the invoice price for valuation purposes, and the original authority was directed to re-quantify the duty and grant refund of any excess amount paid.

Final Conclusion: The appeal succeeded only on the valuation issue, while the remaining findings were left undisturbed, resulting in partial relief to the assessee.

Ratio Decidendi: For valuation under Section 4(4)(d)(ii) of the Central Excise Act, 1944, the excise duty element embedded in the sale price must be excluded from the invoice price to arrive at assessable value.

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