Modvat credit cannot be added to declared price where commercial pricing already reflects the input cost structure.

Declared prices in the Part II price lists could not be enhanced by separately adding Modvat credit availed on imported copper used in manufacture. The Tribunal noted that the valuation issue had already been decided on identical facts, and that the declared prices had been fixed by factoring in the cost of copper, the impact of Modvat credit on countervailing duty paid on the input, and job charges. On that basis, the addition of Modvat credit to the declared price was held impermissible, and the impugned order was set aside.

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Issues: Whether the prices declared in the Part II price lists were liable to be enhanced by adding the Modvat credit availed on the imported copper used in the manufacture of the final product.

Analysis: The appeals involved the same valuation question already concluded by earlier Tribunal decisions on identical facts. The declared prices were fixed by taking into account the cost of copper, the effect of Modvat credit on the countervailing duty paid on the imported input, and job charges. The addition of Modvat credit to the declared prices had already been held impermissible in the earlier line of decisions relied upon.

Conclusion: The enhancement of the declared price by adding Modvat credit was not permissible.

Final Conclusion: The impugned order was set aside and the appeals were allowed.

Ratio Decidendi: Where the declared price already reflects the commercial pricing structure adopted by the assessee, Modvat credit availed on inputs cannot be separately added to enhance assessable value.

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