Assessable value must reflect reduced excise duty after exemption rebate, not unreduced ad valorem duty.

For assessable value under Section 4 of the Central Excises and Salt Act, 1944, only the actual duty payable at removal can be deducted from the wholesale cash price. Where an exemption under Rule 8 of the Central Excise Rules, 1944 reduced duty through a rebate linked to cotton seed oil content, the rebate had to be reflected in the duty deduction itself. The rebate was not to be ignored or treated as a separate post-computation benefit. On that basis, the assessable value had to be calculated by deducting the reduced duty rather than the unreduced ad valorem duty, and the Revenue's computation was upheld.

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Issues: Whether, for determining assessable value under Section 4 of the Central Excises and Salt Act, 1944, the rebate admissible under the exemption notification for use of cotton seed oil had to be deducted from the full ad valorem duty before arriving at the amount of duty payable, or whether the entire duty rate could first be deducted from the wholesale cash price and the rebate thereafter ignored.

Analysis: The relevant law permitted deduction from the wholesale cash price only of trade discount and the amount of duty payable at the time of removal. The exemption notification under Rule 8 of the Central Excise Rules, 1944 reduced the effective duty payable on the goods by the rebate amount linked to cotton seed oil content. The Court held that the rebate was not a separate subsidy or benefit to be kept outside the computation, but a reduction in the actual duty payable. On that basis, the assessable value had to be worked out by deducting the reduced duty, not the unreduced duty.

Conclusion: The petitioners' method of computation was rejected, and the assessable value adopted by the Revenue was upheld.

Ratio Decidendi: Under Section 4 of the Central Excises and Salt Act, 1944, only the actual duty payable after giving effect to an exemption under Rule 8 of the Central Excise Rules, 1944 can be deducted from the wholesale cash price in determining assessable value.

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