Turnover tax exclusion from excise valuation upheld where statutory levy was not part of the sale price.

Turnover tax paid under the Karnataka Sales Tax Act was treated as deductible from the assessable value for central excise valuation because statutory levies not forming part of the sale price are excluded under Section 4(4)(d)(ii) of the Central Excise Act. The Tribunal followed earlier decisions and departmental instructions recognising that such turnover tax is not includible in assessable value. Deduction was therefore allowable, and the denial of deduction was unsustainable.

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Issues: Whether turnover tax paid under the Karnataka Sales Tax Act was deductible from the assessable value of goods for central excise purposes under Section 4(4)(d)(ii) of the Central Excise Act.

Analysis: The issue had already been decided in favour of deduction in earlier Tribunal decisions, where turnover tax under Section 18(3) of the Karnataka Sales Tax Act, 1957 was held to be excludible from assessable value. The Tribunal also followed departmental instructions and the consistent line of decisions recognising that such statutory levies, when not forming part of the sale price, are not includible in valuation for excise purposes.

Conclusion: Turnover tax was deductible from the assessable value, and the denial of deduction was unsustainable.

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