Cum-duty pricing under excise law requires deduction of embedded duty from assessable value when no extra payment is due.

Where scrap is sold for a single stated price and the buyer owes nothing further, that price is treated as a cum-duty price under Section 4 of the Central Excises and Salt Act, 1944. The embedded excise duty must then be deducted from the sale consideration when computing assessable value, because Section 4(4)(d)(ii) excludes duty from the value of excisable goods. On that basis, the duty component is not part of the assessable value even if it is not separately shown in the invoice.

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Issues: Whether the sale price realised on scrap was to be treated as cum-duty price and whether the element of excise duty was deductible while determining the assessable value under Section 4 of the Central Excises and Salt Act, 1944.

Analysis: The respondent had sold the scrap without recovering any amount over and above the stated sale price, and the purchaser was under no obligation to pay anything further. Section 4(1) treats the wholesale price as the basis of valuation, while Section 4(4)(d)(ii) excludes the amount of excise duty from the value of excisable goods. On that footing, where the price charged is a cum-duty price, the duty element embedded in the price must be deducted for arriving at the assessable value. The principle applied was that the entire sale consideration may include excise duty even if it is not shown separately, and in such a case the duty component is not part of the assessable value.

Conclusion: The sale price of the scrap was rightly treated as cum-duty price and the duty element was deductible in computing assessable value; the claim of the Revenue failed.

Ratio Decidendi: Where the sale price is the entire consideration for the goods and the buyer is not liable to pay anything in addition, the embedded excise duty must be excluded from the assessable value under Section 4 of the Central Excises and Salt Act, 1944.

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