Assessable value under excise law excludes a modernisation surcharge treated as borrowing, not a trade discount or rebate.

Amounts collected from industrial consumers under a modernisation and renovation surcharge scheme were not deductible from assessable value as a trade discount or rebate under Section 4 of the Central Excises Act, 1944. The collection was treated as a borrowing arrangement for a specified purpose, with repayment contemplated later, and the later return of the amount was only repayment of an earlier collection. Payment of duty on the amount in the earlier year did not create any right to deduction in the later year, so the abatement claim failed.

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Issues: Whether the amount of Rs. 250 per tonne collected from industrial consumers under the modernisation and renovation surcharge scheme could be excluded from assessable value as discount or rebate under Section 4 of the Central Excises Act, 1944.

Analysis: The surcharge was collected in 1985 for modernisation and renovation with an express understanding that it would be repaid in 1987. The scheme therefore represented a borrowing arrangement for a specified purpose, not a trade discount. The later return of the amount was repayment of the earlier collection and not an allowable deduction as discount known in the trade. The fact that duty had been paid on the amount in 1985 did not justify a corresponding deduction in 1987.

Conclusion: The amount was not deductible from assessable value and the claim for abatement failed.

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