Excise valuation under cum-duty pricing: only actual duty paid is deductible, and provisional assessment was not established.

For excise valuation under Section 4(4)(d)(ii), only the duty actually paid is deductible from the cum-duty price; the benefit of an incentive exemption notification is not separately excluded for valuation purposes, and the department's valuation was upheld. On limitation, the demand was not treated as arising from finalisation of a provisional assessment under Rule 9-B, because the notice proceeded on short levy with suppression under Section 11A. The plea that limitation did not apply on a provisional-assessment basis was therefore rejected, and the demand was not held barred by limitation.

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Issues: (i) Whether, for determining assessable value under Section 4(4)(d)(ii), only the actual duty paid on the goods is deductible or whether the benefit of Notification No. 25/75-C.E. had also to be excluded; (ii) Whether the demand was barred by limitation or whether the case involved provisional assessment under Rule 9-B so that limitation did not apply.

Issue (i): Whether, for determining assessable value under Section 4(4)(d)(ii), only the actual duty paid on the goods is deductible or whether the benefit of Notification No. 25/75-C.E. had also to be excluded.

Analysis: The provision for deduction from cum-duty price was applied in light of settled authority holding that only the real duty actually paid can be excluded while arriving at assessable value. The incentive exemption notification was treated as a straight exemption notification and not as a notification that altered the effective duty deductible for valuation purposes. The amended explanation to Section 4(4)(d)(ii) was read as excluding proforma credit notifications, not as displacing the principle that the actual duty paid alone is relevant.

Conclusion: The deduction was limited to actual duty paid, and the valuation adopted by the department was upheld.

Issue (ii): Whether the demand was barred by limitation or whether the case involved provisional assessment under Rule 9-B so that limitation did not apply.

Analysis: The demand was not shown to arise from finalisation of a provisional assessment. The show cause notice proceeded under Section 11A on the footing of short levy with suppression, which was inconsistent with a case of final assessment under Rule 9-B. On that footing, the extended limitation plea based on provisional approval of the price lists was rejected.

Conclusion: The demand was not held to be barred by limitation, and the finding that the matter was not one of provisional assessment was sustained.

Final Conclusion: The valuation dispute was decided against the assessee, while the limitation challenge based on provisional assessment was not accepted, and the common order was left undisturbed on both issues.

Ratio Decidendi: For excise valuation under Section 4(4)(d)(ii), only duty actually paid is deductible from cum-duty price, and a demand will not be treated as arising from provisional assessment unless finalisation under Rule 9-B is shown.

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