Modvat reversal base is the net price actually realised after trade discount, not the gross listed price.

For reversal of Modvat credit under Rule 57CC of the Central Excise Rules, 1944, the relevant base is the price actually charged by the manufacturer, not a gross listed or catalogue price. Where trade discount is allowed and only the net amount is realised from the buyer, that net price constitutes the sale consideration for computing the 8% reversal. The analysis treats discount as outside the charging base because it is not part of the consideration received, and the cited sales tax authorities and Board clarification were relied on in support of that construction.

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Issues: Whether, for reversal of Modvat credit under Rule 57CC of the Central Excise Rules, 1944, the relevant price is the gross listed price or the net price actually charged after allowing trade discount.

Analysis: Rule 57CC(1) and Rule 57CC(8) require reversal with reference to the price charged by the manufacturer for the goods. The expression "price" was construed to mean the real consideration received from the buyer and not a gross catalogue price that is neither charged nor chargeable. Where trade discount is allowed and only net price is collected, the amount for computing 8% reversal must be the net price actually realised. The reasoning was supported by the principle that discount does not form part of the sale consideration, and by the persuasive analogy of the cited sales tax authorities and the Board's clarification relied upon in the order.

Conclusion: The relevant base for 8% reversal is the actual price charged after trade discount, not the gross listed price, and the assessee succeeds on this issue.

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