Excise duty under the notification includes special excise duty, defeating the demand based on exclusion from deduction computation.

The scope of the expression "excise duty" in the explanation to Notification No. 245/83-C.E. was construed broadly to include both basic excise duty and special excise duty. The Tribunal followed its earlier view on the same notification and rejected the narrower interpretation that would exclude special excise duty from the deduction computation. On that basis, the demand based on such exclusion could not be sustained, and the assessee succeeded with the Order-in-Appeal set aside.

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Issues: Whether the expression "excise duty" in the explanation to Notification No. 245/83-C.E. dated 13.9.1983 includes only basic excise duty or also special excise duty.

Analysis: The appeal turned on the scope of the phrase used in the explanation to the notification. The Tribunal followed its earlier decision on the same notification and held that the expression "excise duty" is wide enough to cover both basic excise duty and special excise duty. On that basis, the demand founded on exclusion of special excise duty from the deduction computation could not stand.

Conclusion: The issue was decided in favour of the assessee, and the Order-in-Appeal was set aside.

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