Automobile cess valuation excludes embedded excise duty and sales tax from the wholesale cash price base.

For automobile cess valuation under the Industries (Development and Regulation) Act, 1951 and the Automobile Cess Rules, 1984, the relevant base is the wholesale cash price after only the permitted deductions. Because Rule 3 applies the Central Excises and Salt Act, 1944 valuation framework, Central Excise duty and sales tax included in the wholesale cash price do not form part of the cess base when they are leviable and embedded in that price. The appellants were therefore entitled to relief.

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Issues: Whether, for determining the value on which automobile cess is leviable under the Industries (Development and Regulation) Act, 1951 and the Automobile Cess Rules, 1984, Central Excise duty and sales tax included in the wholesale cash price are deductible.

Analysis: Section 9(1) of the Industries (Development and Regulation) Act, 1951 defines the relevant value by reference to the wholesale cash price, allowing only trade discount and the amount of duty then payable as deductions. Rule 3 of the Automobile Cess Rules, 1984 directs that the provisions of the Central Excises and Salt Act, 1944 and the rules made thereunder apply, so the cess valuation is to follow the same valuation basis as excise duty. Reading the statutory scheme together, the amount of Central Excise duty and sales tax, if leviable and included in the wholesale cash price, cannot form part of the cess base.

Conclusion: Central Excise duty and sales tax included in the wholesale cash price are deductible while computing automobile cess, and the appellants were entitled to relief.

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