Dharmada collections earmarked for charity were excluded from excise assessable value where no diversion to trading use was proved.

Dharmada receipts separately collected from customers and validly earmarked for charity were treated as charitable collections, not trading receipts, because the Revenue failed to show any diversion to business use. On that basis, such amounts did not form part of the normal price or assessable value for central excise duty, and the demand could not be sustained. The principle applied was that sums collected for charity and not retained as part of the sale consideration are excluded from excise valuation, even if the supporting analogy is drawn from income-tax law.

---

---

Issues: Whether dharmada receipts collected separately in invoices formed part of the normal price and assessable value for central excise duty.

Analysis: The Tribunal found that the appellant was under physical control and that the Revenue had not shown that the dharmada collections were used for any purpose other than charity. Relying on the principle that amounts earmarked for charity and not retained as trading receipts do not form part of the sale price, the Tribunal held that the extra collection of 0.02 paise per kg. was a charitable receipt and not part of the normal price. The argument that the supporting authority arose under income-tax law did not displace the principle applied to the excise valuation dispute.

Conclusion: Dharmada receipts did not form part of the assessable value for central excise duty and the demand could not be sustained.

Ratio Decidendi: Amounts separately collected from customers and validly earmarked for charity, without proof of diversion to trading use, are not part of the price or assessable value for excise duty.

---