Excise valuation excludes post-manufacturing costs, and breach of natural justice can keep writ jurisdiction open despite appeal.

Excise valuation under Section 4 was limited to manufacturing cost and manufacturing profit, so post-manufacturing items such as packing, forwarding, freight and selling profit were excluded from the assessable value; trade discount was allowable if genuinely granted and properly computed. A writ petition remained maintainable despite the statutory appeal because the assessment was made without hearing the assessee or disclosing reasons, amounting to breach of natural justice. Although the assessment was found defective to that extent, restitution was refused because the duty had already been paid and credited, and the assessee had not separately claimed it at the relevant stage.

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Issues: (i) whether the writ petition was maintainable despite the statutory appeal under the excise law, where the assessment order was alleged to have been made in violation of natural justice; (ii) whether special packing charges, forwarding charges, freight and selling cost or selling profit could be included in the assessable value under Section 4; and (iii) whether the petitioner was entitled to refund of duty already paid and credited to the Government.

Issue (i): whether the writ petition was maintainable despite the statutory appeal under the excise law, where the assessment order was alleged to have been made in violation of natural justice.

Analysis: The assessment was made by a quasi-judicial authority affecting civil rights. The petitioner was not given an opportunity to be heard, the reasons for disallowing deductions were not disclosed, and the breach of audi alteram partem was treated as a miscarriage of justice. The existence of an appellate remedy did not cure the nullity alleged in the original order, and the bar to writ jurisdiction was therefore not attracted on these facts.

Conclusion: The writ petition was maintainable, and the preliminary objection to jurisdiction was overruled.

Issue (ii): whether special packing charges, forwarding charges, freight and selling cost or selling profit could be included in the assessable value under Section 4.

Analysis: The governing principle applied was that excise duty is on manufacture, and the assessable value under Section 4 must reflect only the manufacturing cost and manufacturing profit. Post-manufacturing elements such as selling cost, selling profit, freight and similar transport-related expenses were not part of the assessable value. On the facts, the Court accepted that packing, forwarding and freight were post-manufacturing items and could not be loaded into the assessable value. As to trade discount, the Court held that it was allowable where genuinely given to traders, though the authority could compute an average if regional rates differed.

Conclusion: Inclusion of packing, forwarding, freight and selling profit was impermissible, while the trade discount issue was open only to the extent of proper computation and allowance in accordance with law.

Issue (iii): whether the petitioner was entitled to refund of duty already paid and credited to the Government.

Analysis: Although the levy was found to have included impermissible elements, the petitioner had not separately claimed the amount at the relevant stage, had continued to clear goods on the same price lists, and the money had already been credited to the Government. In these circumstances, the Court declined to direct restitution at that stage.

Conclusion: The claim for refund was rejected.

Final Conclusion: The assessment was quashed to the extent it wrongly included post-manufacturing components, but the refund prayer failed, and the authorities were left free to make a fresh assessment after hearing the petitioner and acting in accordance with law.

Ratio Decidendi: For excise valuation under Section 4, only manufacturing cost and manufacturing profit form the assessable value, while post-manufacturing expenses and selling profit are excluded; a denial of hearing in quasi-judicial excise assessment can make the writ remedy maintainable notwithstanding an appellate provision.

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