Central excise valuation excludes deferred sales tax where later payment at net present value does not raise assessable value.

For central excise valuation, sales tax deductible from transaction value is the tax payable under the law at the time of removal. A later statutory facility allowing deferred sales tax to be discharged by payment of net present value does not retrospectively alter the assessable value or convert the original tax liability into additional consideration for the sale. Board circulars treating sales tax under deferment or incentive schemes as deductible support that position. The demand seeking to add the difference between deferred tax and net present value to assessable value was therefore unsustainable.

---

---

Issues: Whether sales tax collected under a deferment scheme, but subsequently discharged by payment of net present value under the State sales tax law, is deductible while determining transaction value for central excise purposes.

Analysis: The valuation provisions under the Central Excise Act require the assessable value to be determined at the time and place of removal. The exclusion for taxes applies to sales tax actually paid or actually payable at that point of time. The State law's later option to discharge deferred sales tax by paying its net present value created a subsequent mode of payment of an existing tax liability and did not convert the originally payable sales tax into additional consideration for the sale of goods. The change in the State law could not retrospectively alter the excisable value already determined on clearance. The Board's circulars consistently treated sales tax under deferment or incentive schemes as deductible, and such circulars supported the assessee's position.

Conclusion: The deferred sales tax was deductible in full while determining transaction value, and the demand treating the difference between deferred tax and net present value as part of assessable value was unsustainable.

Ratio Decidendi: For central excise valuation, sales tax deductible from transaction value is the tax payable under the law at the time of removal, and a later statutory facility permitting discharge of that liability at net present value does not retrospectively increase the assessable value or create additional consideration.

---