Assessable value for excise excludes excess insurance recovery treated as profit element, not consideration for manufacture.

Excess insurance charges recovered from customers were held not to form part of the assessable value for central excise duty, because excise is leviable on manufacture of goods and not on profits realised from an excess recovery. The amount collected over and above the insurance premium actually paid was treated as a profit element rather than consideration for manufacture, and therefore was not includible in assessable value or subject to central excise duty.

---

---

Issues: Whether excess insurance charges recovered from customers formed part of the assessable value for central excise duty.

Analysis: The excess amount recovered towards insurance charges was treated as an amount over and above the insurance premium actually paid. The Tribunal followed the principle that excise duty is leviable on manufacture of goods and not on profits realised from such excess recovery. The cited Supreme Court authority held that the difference between the amount collected and the amount actually incurred was not includible in assessable value as it represented a profit element and not consideration for manufacture.

Conclusion: The excess insurance recovery was not includible in the assessable value and could not be subjected to central excise duty.

---