Sales tax collection is not deductible from excise assessable value when no sales tax is actually payable.

Amounts collected from buyers as sales tax are deductible from central excise assessable value only where sales tax is actually payable under Section 4(4)(d)(ii) of the Central Excise Act, 1944. Because the assessee had been granted exemption from sales tax under a rehabilitation scheme, no sales tax liability existed, so the collection retained the character of part of the price and could not be excluded from assessable value. The amount was therefore includible in the assessable value, and the assessee's contention failed.

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Issues: Whether the amount collected from buyers as sales tax, when the assessee had been exempted from payment of sales tax under a rehabilitation scheme, was deductible from the assessable value for central excise purposes under Section 4(4)(d)(ii) of the Central Excise Act, 1944.

Analysis: The deduction under Section 4(4)(d)(ii) is confined to sales tax actually payable. Since the assessee had been granted exemption from sales tax, no sales tax was payable. The amount collected from buyers therefore retained the character of part of the price and could not be excluded from assessable value.

Conclusion: The amount was includible in the assessable value and the contention of the assessee failed.

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