TaxTMI 
TaxTMI 
2004 (1) TMI 77
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.... 4 of the First Schedule to the Central Excises and Salt Act, 1944 (1 of 1944) (hereinafter referred to as the Central Excises Act), from so much of the duty of excise leviable thereon both under the Central Excises Act and the Additional Duties of Excise Act, as is in excess of the duty specified in the corresponding entry in column (2) thereof. THE TABLE Description Rate of duty (1) (2) Cigarettes of which the value per one thousand - (i) does not exceed rupees ten One hundred and fifty per cent. ad valorem plus twenty-one rupees per one thousand (ii) exceeds rupees ten but does not exceed rupees thirty-five One hundred and fifty per cent. ad valorem plus ten per cent. ad valorem for every additional rupee or part thereof in excess of a value of rupees ten per one thousand, plus twenty-one rupees per one thousand (iii) exceeds rupees thirty-five Four hundred per cent. ad valorem plus twenty-one rupees per one thousand : Provided that - (i) if it is proved to the satisfaction of an officer not below the rank of an Assistant Collector of Central Excise that any cigarettes have been manufactured wholly from unmanufactured tobacco f....
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....50% 45.703 45.703 49.632 H Duty payable on 1000 cig. i.e. D + G 66.703 66.703 65.132 5.500 61.203 *(1) Duty on raw tobacco was Rs. 5.50 per kg. (2) from 1 kg. Tobacco, approx. 1000 cigarettes are manufactured. 6. On behalf of the Appellants it is submitted that the Notification has to be read in terms of Section 4(4)(d) of the Central Excise Act which reads as follows :- "4. Valuation of excisable goods for purposes of charging of duty of excise. - (1) Where under this Act, the duty of excise is chargeable on any excisable goods with reference to value, such value shall, subject to the other provisions of this section, be deemed to be :- ....................... (4) For the purposes of this section, - (d) "value" in relation to any excisable goods :- ......................... [Explanation : For the purposes of this sub-clause, the amount of the duty of excise payable on any excisable goods shall be the sum total of - (a) the effective duty of exci....
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....pon the case in Kirloskar Brothers Ltd. v. Union of India reported in 1992 (59) E.L.T. 3 (S.C.). In this case it was held that the deduction had to be made at the time of payment of duty and not at the time of arriving at the assessable value. However this finding is based upon the wording of the exemption Notification in that case which read as follows :- "Provided that :- (i) Where the aforesaid pumps on which the duty of excise is leviable are fitted with duty paid internal combustion engine falling under sub-item (ii) of Item No. 29 or Electric motors falling under sub-item 2(ii) of Item No. 30 of the First Schedule to the aforesaid Act such power driven pumps shall also be exempted from so much of the duty of excise leviable thereon as is equivalent to the duty of excise leviable thereon as is equivalent to the duty of excise or the additional excise duty under Section 2A of the Indian Tariff Act, 1934 (32 of 1934) as the case may be already paid on such internal combustion engine or Electric Motors." The wording of that Notification were entirely different from the wording of the Notification which is under consideration in this case. In this case the wording o....
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....cum-duty price which the wholesaler has to pay to the manufacturer. The cost of production, estimated profit and the taxes on manufacture and sale of the goods are usually included in the wholesale price of the goods. It is only because the wholesale price is usually the cum-duty price that sub-section (4)(d) lays down that 'value' will not include duty of excise, sales tax and other taxes, if any, payable on the goods. But if a manufacturer includes in the wholesale price any amount by way of tax, even when no such tax is payable, then he is really including something in the price which is not payable as duty at all. He is really increasing the profit element included in the wholesale price in another guise. In such a situation, there cannot be any question of deduction of duty payable on the goods from the wholesale price because as a matter of fact, no duty has actually been included in the wholesale price." 8. Clause (d) of sub-section (4) of Section 4 lays down that 'value' will include the cost of packing of the goods when the goods are sold in packed condition in certain cases. Sub-clause (ii) of clause (d) provides that the value will not include "the amount of duty of e....