Statutory valuation under excise law governs exemption eligibility where duty depends on goods' value.

Where an exemption notification makes excise duty depend on the value of goods, the statutory valuation method under Section 4 of the Central Excises and Salt Act applies to determine that value. The wholesale cash price must be adjusted in accordance with Section 4 and its Explanation, including deduction of trade discount and the duty element, so that footwear with an assessable value not exceeding Rs. 5 per pair falls within the exemption. On that construction, the footwear in question was exempt from duty, and duty already collected was refundable.

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Issues: Whether, for deciding the availability of exemption under the notification dated 24 July 1967, the value of footwear had to be determined under Section 4 of the Central Excises and Salt Act, 1944 by deducting trade discount and the duty element from the wholesale price, so that footwear with an assessable value not exceeding Rs. 5 per pair would be exempt from excise duty.

Analysis: Section 4 lays down a comprehensive and mandatory method for determining value in every case where duty is chargeable at a rate dependent on value. The notification made chargeability to duty depend entirely on whether the value of footwear exceeded Rs. 5 per pair. That brought the goods within the ambit of Section 4, because the statutory method of valuation applies whenever duty is linked to value, including cases where the ultimate rate becomes nil by reason of exemption. The Court held that the wholesale cash price had to be adjusted in the manner mandated by Section 4 and its Explanation, including deduction of trade discount and the amount of duty payable at the time of removal.

Conclusion: The value had to be computed under Section 4, and footwear whose value so computed did not exceed Rs. 5 per pair was exempt from excise duty under the notification.

Final Conclusion: The exemption applied to the footwear in question, and the duty collected from the company was liable to be refunded.

Ratio Decidendi: Where an exemption notification makes duty liability depend on the value of goods, the statutory valuation method under Section 4 governs determination of that value, including the mandatory deductions specified in the Explanation.

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