Cum-duty valuation under central excise requires deduction of only the effective duty rate, not the tariff rate.

For valuation under the amended Explanation to Section 4(4)(d)(ii) of the Central Excise Act, 1944, only the effective rate of duty is deductible from a cum-duty price. Any amount collected in excess in the name of duty forms part of the cum-duty price and must be included when recalculating assessable value. The tariff rate of duty is not the proper deduction for this purpose, and the demand was sustained on that basis.

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Issues: Whether, for computation of assessable value under the amended Explanation to Section 4(4)(d)(ii) of the Central Excise Act, 1944, the tariff rate of duty or the effective rate of duty was to be deducted from the cum-duty price.

Analysis: The amended provision in the Explanation to Section 4(4)(d)(ii) required deduction of the effective rate of duty. Any excess amount collected in the name of duty formed part of the cum-duty price, and duty was payable after recalculation of the assessable value on that basis.

Conclusion: The claim that the tariff rate of duty had to be deducted was rejected. The deduction was to be made only at the effective rate of duty, and the demand was sustained.

Ratio Decidendi: Under the amended Explanation to Section 4(4)(d)(ii) of the Central Excise Act, 1944, the effective rate of duty alone is deductible from a cum-duty price for valuation purposes.

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