Declared value and penalty under additional excise duty depend on true sale records and express statutory authority.

Where additional excise duty is linked to value slabs, the actual sale value shown in private records may be used if duplicate invoices and suppression show that the declared value is not genuine. Trader's profit is not, in principle, includible in the assessable value of processed fabrics, although any deduction depends on whether it would alter the applicable slab on the facts of a given case. Penalties under the Central Excise Rules, 1944 cannot be imposed for contraventions connected with levy and collection under the Additional Duties of Excise (Goods of Special Importance) Act, 1957 unless that Act expressly authorises such penalty.

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Issues: (i) Whether the declared value of the processed man-made fabrics could be rejected and the higher value reflected in duplicate invoices taken for determining the applicable duty slab under the Additional Duties of Excise (Goods of Special Importance) Act, 1957; (ii) Whether the trader's profit was required to be excluded while fixing the value of the processed fabrics; (iii) Whether penalties could be imposed under the Central Excise Rules, 1944 for contraventions connected with levy and collection of additional excise duty under the Additional Duties of Excise (Goods of Special Importance) Act, 1957.

Issue (i): Whether the declared value of the processed man-made fabrics could be rejected and the higher value reflected in duplicate invoices taken for determining the applicable duty slab under the Additional Duties of Excise (Goods of Special Importance) Act, 1957.

Analysis: The duty was levied at specific rates linked to value ranges, so the correct value of the processed fabric was material to identify the applicable slab. The record showed maintenance of duplicate sets of invoices and suppression of the actual higher sale value from the department. The declared value was therefore not the true value, and the higher value evidenced by the private records and invoices was the proper basis for assessment.

Conclusion: The declared value was rightly rejected and the higher value was correctly adopted for determining duty liability, in favour of Revenue on this issue.

Issue (ii): Whether the trader's profit was required to be excluded while fixing the value of the processed fabrics.

Analysis: For processed fabrics, the assessable value is the intrinsic value of the goods, comprising the grey cloth value, job work, manufacturing expenses and manufacturing profit. Trader's profit, being post-manufacturing profit, is not includible in principle. On the facts, however, the differential between the declared value and the actual selling value was much higher than the amount claimed as trader's profit in the declaration, so exclusion of that amount would not change the duty slab reached on the evidence before the Tribunal. Limited relief was left open only if, in an individual case, deduction of the claimed profit would move the goods to a lower slab.

Conclusion: Trader's profit is not includible in principle, but no substantive reduction in duty followed on the facts proved, save for the limited case-wise relief indicated, in favour of the assessee only to that limited extent.

Issue (iii): Whether penalties could be imposed under the Central Excise Rules, 1944 for contraventions connected with levy and collection of additional excise duty under the Additional Duties of Excise (Goods of Special Importance) Act, 1957.

Analysis: Section 3(3) of the 1957 Act made the Central Excise Act and the rules applicable for levy and collection, but the Tribunal followed the Delhi High Court view that this incorporation did not supply an express mandate for penalty under the Additional Duties Act. Since penalty is a burden requiring clear statutory authority, and none was found in the 1957 Act for the penalties imposed, the penal orders could not stand.

Conclusion: The penalties were unsustainable and were set aside, in favour of the assessee.

Final Conclusion: The duty demands were sustained, subject to the limited case-wise relief noted on valuation, but the penalties were quashed, so the appeals succeeded only in part.

Ratio Decidendi: Where additional excise duty is linked to value slabs, the actual value evidenced by the true sale records may be used to determine the slab, and penalty cannot be imposed under the Additional Duties of Excise (Goods of Special Importance) Act, 1957 unless the Act expressly authorises it.

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