Exemption-notification discount cannot reduce excise assessable value absent actual trade discount under Section 4.

The discount contemplated by Notification No. 161/66-C.E. was confined to the exemption formula and did not govern valuation under Section 4 of the Central Excises Act, 1944. Assessable value for Notification No. 83/83 had to be determined at the factory gate, allowing only admissible trade discount actually shown to exist. As no real discount to customers or wholesalers was established, the notional discount in the exemption notification could not be deducted from assessable value. On that basis, the appellate view was rejected and the assessment made by the Assistant Collector was restored.

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Issues: Whether the discount contemplated by Notification No. 161/66-C.E. could be deducted while determining assessable value under Section 4 of the Central Excises Act, 1944 for computing eligibility under Notification No. 83/83.

Analysis: Notification No. 161/66-C.E. granted exemption only from duty in excess of duty computed on the basis of the specified formula, namely wholesale price less the stipulated percentage discount. It did not prescribe the method for arriving at assessable value. The assessable value for the purpose of Notification No. 83/83 had to be determined under Section 4 of the Central Excises Act, 1944 on the basis of the price at the factory gate, with only admissible trade discount being deductible. Since no actual discount to customers or wholesalers was shown, the notional discount referred to in the exemption notification could not be imported into Section 4 valuation.

Conclusion: The discount under Notification No. 161/66-C.E. could not be deducted in computing assessable value under Section 4 of the Central Excises Act, 1944, and the view taken by the Collector (Appeals) was ? I should avoid non-English. The appeal failed on that point and the assessment made by the Assistant Collector was restored.

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