Excise valuation excludes post-manufacturing expenses from assessable value, limiting duty to factory-gate wholesale price.

Assessable value for excise duty under Section 4 is confined to the wholesale cash price at the factory gate, or the nearest wholesale market where no factory-gate market exists. Manufacturing cost and manufacturing profit are included, but post-manufacturing expenses such as freight, octroi, advertising, distribution and interest are excluded because they relate to selling and post-production operations. The assessing authority must examine the price lists and identify which claimed amounts are truly post-manufacturing before finalising the levy.

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Issues: Whether, for assessment of excise duty under Section 4 of the Central Excises and Salt Act, 1944, the assessable value must be determined by excluding post-manufacturing expenses such as freight, advertising, distribution and interest.

Analysis: Section 4 requires valuation on the basis of the wholesale cash price at the factory gate or, where no wholesale market exists at the factory place, at the nearest wholesale market. The value is confined to manufacturing cost and manufacturing profit. Amounts attributable to post-manufacturing operations, including selling cost and selling profit, freight, octroi, advertising, distribution and interest, do not form part of the assessable value. The authorities were required to examine the price lists and ascertain which claimed expenses were in fact post-manufacturing expenses before finalising the levy.

Conclusion: The petitioner was entitled to deduction of post-manufacturing expenses while determining assessable value under Section 4, and the impugned orders were liable to be quashed.

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