1983 (5) TMI 33 - SUPREME COURT

Position prior to the amendment of section 4 of the Central Excises and Salt Act, 1944 and as amended by Act XXII of 1973

Held that:- The wholesale cash price at the factory gate is the basis for determination of value of an excisable article and whatever be the wholesale cash price at which the excisable article is sold in wholesale trade at the factory gate, would represent the value of the excisable article on which excise duty is leviable and no deduction from such wholesale cash price is permissible except in respect of trade discount and the amount of excise duty payable at the time of removal of the excisable article from the factory or any other premises of manufacture or production. No amount is deductible from such price in respect of advertisement or publicity expenses incurred by the assessee or expenses in connection with the storage of excisable article or expenses of the sales organisation or any other expenses incurred by the assessee upto the date of delivery. So far as the cost of packing is concerned, no deduction is permissible in respect of such cost from the wholesale cash price of the excisable article at the factory gate, whether the packing be primary packing or secondary packing and whether its cost is shown separately or as included in the wholesale cash price.

After amendment the price at which the excisable goods are ordinarily sold by the assessee to a buyer in the course of wholesale trade for delivery at the time and place of removal as defined in sub-section (4)(b) of section 4 is the basis for determination of excisable value provided, of course, the buyer is not a related person within the meaning of sub-section (4)(c) of section 4 and the price is the sole consideration for the sale. Where wholesale price of any excisable goods for delivery at the place of removal is not known and the value thereof is determined with reference to the wholesale price for delivery at a place other than the place of removal, the cost of transportation from the place of removal to the place of delivery should be excluded from such price