Assessable value under excise law excludes only legally deductible elements; limitation and suppression issues were remanded for fresh determination.

An amount retained by the assessee as the difference between tariff duty collected and concessional duty paid under Notification No. 128/77 was not deductible in computing assessable value under section 4 of the Central Excises and Salt Act, because only legally deductible elements can reduce the sale price; the Tribunal applied its prior ruling and upheld the lower authorities on this point. The limitation and consequential duty-liability issue was remanded for fresh determination because the record was insufficient to decide suppression and the applicability of the extended period, particularly as the relevant invoices and price lists were not clearly before the proper officer.

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Issues: (i) Whether, in computing assessable value under section 4 of the Central Excises and Salt Act, the amount representing duty collected at the tariff rate but paid over to the department at the concessional rate under Notification No. 128/77 was deductible. (ii) Whether the demand relating to limitation and duty liability should stand or be remanded for fresh determination.

Issue (i): Whether, in computing assessable value under section 4 of the Central Excises and Salt Act, the amount representing duty collected at the tariff rate but paid over to the department at the concessional rate under Notification No. 128/77 was deductible.

Analysis: The assessable value can be reduced only by an element that is shown to be deductible in law. The amount retained by the assessee as the difference between tariff duty and concessional duty was not itself a legally deductible element of the normal sale price, nor was it shown to be deductible on any other recognised basis. The prior decision followed by the Tribunal was applied to the same effect.

Conclusion: The amount was not deductible and the lower authorities were correct on this issue, against the assessee.

Issue (ii): Whether the demand relating to limitation and duty liability should stand or be remanded for fresh determination.

Analysis: The record showed that RT-12 returns had been finalised, but it was unclear whether the invoices and price lists necessary to determine suppression and the applicability of the extended period had been before the proper officer. In the absence of sufficient material on these aspects, a final finding on suppression and consequential duty liability could not safely be recorded at this stage. The appropriate course was to set aside that part of the order and remit the matter for fresh consideration after giving the assessee an opportunity to place its case.

Conclusion: The limitation and consequential duty-liability question was remanded for fresh decision, in favour of the assessee to that extent.

Final Conclusion: The assessee failed on the merits of deductibility under section 4, but the controversy concerning limitation and consequential demand was sent back for reconsideration, leaving the matter only partly resolved.

Ratio Decidendi: An element included in the sale price is not deductible in assessing value unless it is shown to be legally deductible under section 4, and where material on suppression or limitation is insufficient, the demand may be remitted for fresh adjudication.

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