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TMI Blog1987 (2) TMI 252X X X X Extracts X X X X X X X X Extracts X X X X ..... s increase there was a larger deduction from the excise duty payable by them. By means of adding the value of sanding and levelling, the value of the unveneered board increased. 3. The learned Counsel said that the factory clears only unsanded, unlevelled unveneered board. The sanding and leveling is done only for the purpose of veneering with plywood and, therefore, this process has no relevance to the value of unveneered board as known in the market. He illustrated this by saying that if unveneered boards are purchased from another factory for veneering, the claim for deduction can be only equal to the price paid to that factory for the unveneered boards. He repeated that there was no sale at all of sanded and levelled unveneered boards, and so the value of such boards can have no connection with assessments. 4. He quoted 1980 E.L.T. 704 re: Indian Vegetable Products, and read paragraph 8 of the judgment. He also read paragraph 2 of 1986 (2.5) E.L.T. 625 re: Shalimar Textiles. 5. There was no time bar, because there had been a clear mis-statement on the part of the factory by reason of which they were able to clear their veneered boards by taking a higher deduction to which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... application refer only to the process of manufacture of veneered and unveneered particle boards. The cross objection contains arguments in favour of their own case. 10.We shall open our examination by reproducing notification No. 127/78-C.E., dated 29th May, 1978. It reads :- In exercise of the powers conferred by sub-rule (1) of rule 8 of the Central Excise Rules, 1944, the Central Government hereby exempts particle boards, veneered with plywood panels or veneered with single ply veneer on one or both sides and falling under Item 16-B of the first schedule of the Central Excises and Salt Act, 1944 (1 of 1944) from so much of the duty of excise as is equivalent of the duty of excise leviable with reference to that part of the value thereof which represents the value of unveneered particle boards. It is the claim of the manufacturers that the value up to and including the cost of sanding and leveling is the value which represents the value of unveneered particle boards. They maintain that it makes no difference if they do not sell such sanded and levelled boards; they admit that they do not, in fact, sell them. To go by the words of the notification alone, it is the value of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... excise calculations. An imaginary price or value would not count and cannot figure in assessments. A value which attaches to an article of sentimental value, but which does not determine its sale in the market, would not assume any office under the law. The value must be the normal price; that is to say, it must be a price that the article fetches in actual sale. The value is not the value one would tag to an article; it would have to be the price in cold money, the price at which it is bought and sold, a price which can be determined with reference to its composition, component, cost; a price that can be perceived in relation to known constituents; that price alone can be deemed to be such value. 14. A question can be asked whether this value defined by Section 4 would apply to the calculation of the value which represents the value of the unveneered particle boards. It is not without significance that the wording in the notification bears a close resemblance to the terms of the section. The term the duty of excise is chargeable on any excisable goods with reference to value appearing in the first sentence of Section 4 is almost repeated, though in a somewhat modified form, in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rocess under the Central Excise Valuation Rules to uncover the cost of production or manufacture, the profits, if any, that would have been earned on the sale of these goods etc. etc. While such proceedings might capitally fit the unsanded, unlevelled, unveneered boards, if the need for such valuation should arise, because these boards are sold. Fortunately, they do not require, as far as we can tell, the help of the valuation rules; but that is not a matter of concern for us. 17. Therefore, the sanded, leveled boards do not have a value that is intelligible in terms of the Central Excises and Salt Act; the value assigned to them by their manufacturers and approved by the Collector (Appeals) is not a value that is ascertainable, that can be arrived at, that can be measured and examined by the tests provided by the Act, and, hence, is not a value that can be relied upon for the purposes of the notification No. 127/78-C.E. 18. The Assistant Collector, however, was wrong to say that there had been a mis-statement. He himself says that there had been a misunderstanding in the interpretation. If there had been a misunderstanding in the interpretation, there cannot have been any mis- ..... X X X X Extracts X X X X X X X X Extracts X X X X
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