Excise valuation governs cess computation under paper and paper board cess rules, not a parent-statute ceiling definition.

For cess on paper and paper board under the Paper and Paper Board Cess Rules, 1981, the valuation machinery under section 4 of the Central Excises and Salt Act, 1944 applies to levy and collection. The valuation definition in the Explanation to section 9(1) of the Industries (Development and Regulation) Act, 1951 governs only the ceiling on cess, not the actual computation under the cess rules. Because Rule 3 adopts excise valuation principles, cess is computed on the section 4 assessable value and not on a value increased by adding excise duty.

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Issues: Whether, for levy of cess on paper and paper board under the Paper and Paper Board Cess Rules, 1981, the assessable value is to be determined under section 4 of the Central Excises and Salt Act, 1944 or by including excise duty in the value.

Analysis: The valuation provision in the Explanation to section 9(1) of the Industries (Development and Regulation) Act, 1951 was held to govern only the ceiling on cess and not the computation of cess under the relevant cess rules. Rule 3 of the Paper and Paper Board Cess Rules, 1981 is in pari materia with the rule considered by the Supreme Court in the automobile cess decision, and it makes the valuation machinery under the Central Excises and Salt Act applicable for levy and collection of cess. On that basis, the Commissioner (Appeals) correctly applied section 4 valuation.

Conclusion: The cess was rightly levied on the value determined under section 4 of the Central Excises and Salt Act, 1944, and not on a value enhanced by adding excise duty. The appeal fails.

Ratio Decidendi: Where the cess rules adopt the excise law valuation machinery for levy and collection, cess is to be computed according to section 4 excise valuation and not by resorting to the separate valuation definition in the parent statute's ceiling provision.

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