1987 (6) TMI 291

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....[Order per : G. Sankaran, Sr. Vice-President]. - The issue for determination in this appeal is whether the element of compounded excise duty on cotton yarn payable, and paid, at the time of clearance of fabrics (as provided under Central Excise Rules 96V/96W) and expressed with reference to the variety and area of fabrics forms part of the assessable value of the fabrics. The appellant's conten....

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....ed tin the time of clearance of fabrics but did not alter the character of the yarn duty. In other words, the deferred duty was still duty on yarn, not on fabrics. Sec. 4(4)(d)(ii) of the Act required exclusion of the duty element on the excisable goods sought to be removed. The goods in the present case being fabrics, the yarn having already been converted into fabric, the duty on fabrics alone h....

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....view, he had very lucidly and correctly dealt with in his order. 5. The appellants' further contention is that the "duty" which ought to be excluded from the assessable value of fabrics in terms of Section 4(4)(d)(ii) is not merely the duty payable on the finished goods (fabrics, in the present case) but all duties of "excise.....if any, payable on such goods". Hence the compounded duty on yarn....

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....eter of fabric. As the Collector (Appeals) has rightly observed, the latter duty is still the deferred yarn duty and not duty on fabric and it is the duty on fabric alone that is required to be deducted from the "normal price" of the fabric. 6. The argument that compounded duty on yarn does not form part of the manufacturing cost of the fabric and that duty can be levied only on the manufacturi....