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Issues: Whether turnover tax was deductible from the assessable value under section 4 of the Central Excise Act, 1944, despite a statutory bar on collection of such tax from the buyer under the State sales tax law.
Analysis: The Tribunal held that the legal embargo in the State sales tax law on collecting turnover tax from the purchaser did not change the character of turnover tax for central excise valuation. Reliance was placed on departmental instructions and the Law Ministry's view, which treated turnover tax as deductible from the sale price so long as payment of such tax was established. The Tribunal further held that the cited Supreme Court decision dealing with exemption notification issues did not govern the question of deduction of turnover tax from assessable value.
Conclusion: Turnover tax was allowable as a deduction, and the order disallowing the deduction was set aside in favour of the assessee.
Final Conclusion: The assessee's claim for turnover tax abatement was upheld and the deduction was restored for valuation under central excise law.
Ratio Decidendi: Turnover tax paid by the assessee is deductible from the assessable value under central excise valuation even if State law prohibits its collection from the buyer, provided the levy is actually paid and the precedent relied upon is not on the same valuation issue.
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