Turnover tax exclusion from excise valuation upheld where the levy could not be passed on to customers.

Turnover tax payable under the Karnataka Sales Tax Act, 1957 was held deductible from the assessable value of excisable goods because it was a statutory levy that the dealer could not pass on to the customer. The Tribunal applied the settled principle that taxes payable on goods are excluded from central excise valuation, and accepted that actual payment at the computation stage was not required. The Revenue's challenge failed, and the exclusion of turnover tax from assessable value was upheld.

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Issues: Whether turnover tax payable under the Karnataka Sales Tax Act, 1957 could be excluded from the assessable value of excisable goods while determining value under the Central Excises and Salt Act, 1944.

Analysis: The turnover tax was treated as a statutory levy under the Karnataka Sales Tax Act, 1957, and the governing provision prevented the dealer from passing it on to the customer. Relying on the settled position that taxes payable on goods are not to be included in the value for central excise purposes, the Tribunal held that turnover tax was deductible from valuation even though it had not yet been actually paid at the stage of computation. The issue was considered no longer res integra in light of the Supreme Court decisions relied upon.

Conclusion: Turnover tax was correctly excluded from the assessable value, and the Revenue's challenge failed.

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