Excise assessable value excludes conduit collections and packing charges when they are not part of sale consideration.

Amounts collected by manufacturers towards Steel Development Fund, Engineering Goods Export Assistance Fund and Joint Plant Committee Cess were treated as excludible from excise assessable value because they were separately collected and remitted to a third-party committee, not retained as sale consideration. Under the valuation scheme, only the normal price of goods sold by the assessee can enter assessable value, and sums collected merely in a representative capacity do not form part of the price. Packing charges were also held not includible on the facts and valuation principle applied. The lower authorities' contrary orders were set aside and the Revenue's appeals failed.

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Issues: (i) Whether amounts collected towards Steel Development Fund, Engineering Goods Export Assistance Fund and Joint Plant Committee Cess formed part of the assessable value of iron and steel for central excise purposes; (ii) Whether packing charges were includible in the assessable value.

Issue (i): Whether amounts collected towards Steel Development Fund, Engineering Goods Export Assistance Fund and Joint Plant Committee Cess formed part of the assessable value of iron and steel for central excise purposes.

Analysis: The relevant control notifications authorised the Committee to add elements to the ex-works price, but the additional levies were to be collected separately by the manufacturers and remitted to the Joint Plant Committee. The amounts did not accrue to the manufacturers as part of sale consideration and were collected only in a representative capacity. Under the valuation scheme of section 4 of the Central Excise Act, 1944, only the normal price of the goods sold by the assessee can enter assessable value, and sums not appropriated by the manufacturer and not forming part of the price cannot be treated as value of the goods.

Conclusion: The amounts collected towards Steel Development Fund, Engineering Goods Export Assistance Fund and Joint Plant Committee Cess are not includible in the assessable value and the issue is answered in favour of the assessee.

Issue (ii): Whether packing charges were includible in the assessable value.

Analysis: The question was covered by the earlier Tribunal view relied upon in the order, which held that packing charges were not includible in the assessable value on the facts and valuation principle applied.

Conclusion: Packing charges are not includible in the assessable value and the issue is answered in favour of the assessee.

Final Conclusion: The valuation of the goods excluded the disputed fund collections and packing charges, and the contrary orders of the lower authorities were set aside while the Revenue appeals failed.

Ratio Decidendi: Amounts collected by the manufacturer merely as a conduit for remittance to a third-party committee, and not retained as part of the sale price, do not form part of the assessable value under excise valuation provisions.

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