Excise valuation with actual admissible deductions required recomputation, leaving no differential duty and upholding relief from demand.

For excise valuation, provisional deductions can be replaced by actual admissible deductions supported by certified accounts, and the assessable value must be recomputed on that basis. Where the actual deductions under the permitted heads exceeded the deductions initially claimed in the notice, no differential duty survived and the demand could not be sustained. The same factual and valuation basis also supported dropping the penalty and rejecting the Revenue's challenge to that relief. The assessee's appeal was allowed and the Revenue's appeal was dismissed.

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Issues: Whether, for valuation under excise law, the demand could survive when the actual admissible deductions under the permissible heads exceeded the deductions provisionally claimed, and whether the Revenue's appeal against dropping of demand was maintainable.

Analysis: The deduction figures claimed by the assessee were treated as provisional, and the actual expenditure under the permissible heads was later supported by certified accounts. On those facts, the assessable value had to be recomputed by taking the actual admissible deductions into account. Since the actual deductions under the allowed heads were more than the deductions claimed in the show cause notice, no differential duty survived. The same reasoning also supported the order dropping the demand and penalty in the connected Revenue matter.

Conclusion: The demand was not sustainable on the recomputed figures, and the assessee's appeal was allowed while the Revenue's appeal was dismissed.

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