TaxTMI 
TaxTMI 
1996 (5) TMI 86
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....o as `the Rules') the Cetral Government had power to issue notifications for exempting the amount of duty of excise leviable on goods to the extent mentioned in such notifications. The Central Government had issued a series of notifications under which exemption was granted from levy of duty of excise. The language of the notifications provided that the goods specified in the notification shall be exempted 'from so much of duty of excise leviable thereon as is in excess of ...' the specified amount. The contention of the assessees is that on a true interpretation of the notifications, the assessable value has to be determined first and the notification has to be applied thereafter. 3.This controversy has been dealt with in a large number of cases before the amendment of Section 4 of the Act. The Delhi High Court in the case of Modi Rubber Limited v. Central Board of Excise and Customs, 1978 (2) E.L.T. (J 127) (Del.) = ILR 1978 (2) Delhi 352, held that from the language of the notification it appeared that the duty of excise leviable and the assessable value of the goods had to be determined first, the relief under the notification had to be given thereafter. According to the appel....
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.... respect to or reduction of excise on such goods equal to any duty of excise already paid on the raw material or component parts used in the production or manufacture of such goods) from the duty of excise under such Act, is for the time being in force, the duty of excise computed with reference to the rate specified in such Act in respect of such goods as reduced so as to give full and complete effect to such exemption; and in any other case, the duty of excise computed with(ii) referece to the rate specified in such Act, in respect of such goods. 5.The legislative intent is quite clear. The Explanation has been brought into effect from 1-10-1975. By virtue of sub-section (2) of Section 47 of the Finance Act, 1982, all actions taken during the period 1st October, 1975 to 27th February, 1982 have been deemed to have been taken for all purposes as validly and effectively taken or done as if the Explanation was in force. This will have the effect notwithstanding anything contained in any judgment, decree or order of any court, Tribunal or other authority. There is no reason to assume that the law laid down in the earlier judgments which had been rendered before the amendments were ....
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....h duty had to be paid. In effect, Mr. Salve has contended that the amendments have not really brought about any effective change in the manner of calculation of the "amout of excise duty" payable under Section 4(4)(d)(ii). 8.This contention is not borne out by the language of the Section and also the notification. It is of significance that the notification seeks to exempt the excisable goods `from so much of the duty of excise leviable thereon ..... as is in excess of seventy five per cent of such duty'. Section 4(4)(d)(ii) speaks of the amount of excise duty payable. What is to be excluded from `value' is only the amount of duty which is payable. The entire amount which is otherwise leviable under the Central Excise Act will not be payable because of the exemption from duty granted in the notification. No question can arise of deduction in the first instance of the amount which is not payable from the wholesale price for determination of the assessable value. Having regard to the language of Section 4(4)(d)(ii) and, in particular, the Explanation added thereto and also to the language of the notification, we are unable to uphold the contention of Mr. Salve that the assessment of....
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....five per cent of such duty'. Therefore, the excess production will bear excise duty only to the extent of seventy five per cent of what would have been otherwise payable by the assessee, under the Act calculated according to the rate prescribed in the Schedule. 12.The contention of Mr. Salve that the calculation will have to be made in two stages is not supported by the wording of the Explanation. A clear distinction has been drawn in the section between the amount of duty leviable and the amount of duty payable. `Value' will not include the amount of duty of excise which is payable. This amount has to be calculated on the basis of the duty levied under the Act and also after taking into account any relief from duty given by any order or notification issued by the Government. The resultant figure is the amount of duty of excise which is payable and deductible from the wholesale price. There is nothing in the Act to suggest that the `value' has to be calculated by deducting in the first place the tax leviable under the Act, from the wholesale price. Thereafter, a second valuation on the basis of the notification will have to be made. The Explanation clearly states that the duty of ....