Excise valuation under cum-duty pricing permits deduction only of effective duty actually payable, not gross duty otherwise payable.

For valuation of excisable goods under Section 4(4)(d)(ii) of the Central Excises and Salt Act, the deductible amount from a cum-duty price is only the effective excise duty actually payable where an exemption notification applies. The Explanation inserted by the Finance Act, 1982 with retrospective effect from 1-10-1975 was treated as part of the statutory scheme and as governing the computation of assessable value. It clarified that, in exempted cases, the deduction is limited to the duty actually payable after exemption, not the gross duty otherwise payable. The contrary view that the full duty could be excluded was no longer tenable.

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Issues: Whether, for determining the value of excisable goods under Section 4(4)(d)(ii) of the Central Excises and Salt Act, 1944, the deduction from the normal price is to be limited to the effective excise duty actually payable after exemption, or whether the gross duty otherwise payable must be excluded.

Analysis: The dispute turned on the meaning of the amount of duty deductible from the cum-duty price under Section 4(4)(d)(ii). The Explanation inserted by Clause 47 of the Finance Act, 1982 with retrospective effect from 1-10-1975 made it explicit that, where an exemption notification is in force, the deductible amount is only the effective duty of excise, and that in any other case the duty computed at the specified rate is relevant. The Explanation was treated as part of the statutory provision and as governing the computation of assessable value for the relevant period. On that basis, the earlier view that the full duty otherwise payable could be excluded was no longer tenable.

Conclusion: The deductible amount from the cum-duty price is only the effective excise duty actually payable, and not the gross duty otherwise payable; the contention of the assessee was rejected.

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