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TMI Blog1986 (1) TMI 115X X X X Extracts X X X X X X X X Extracts X X X X ..... ation No. 128/1977, dated 18-6-1977 exempted certain categories of papers manufactured in paper mills of the type described in the table to the notification from so much of the duty of excise leviable as specified in the schedule. 2. On or about 25th September, 1980 the officers of the Central Excise, Preventive Department, Nagpur in the course of their preventive checks on Nagpur-Kamptee Road intercepted a truck No. MRL 4187 which was loaded with Kraft paper. The truck was going from Nagpur towards Kamptee. On investigation it was found that the said truck was transporting 37 packages of Kraft paper manufactured by the petitioner and the driver was not carrying the relative gate pass evidencing the clearance of the goods on payment of excise duty. As a follow up action the officers of the Preventive Department visited the premises of the petitioner Paper Mills for verification and checking of the accounts. At the premises they noticed another truck No. MHB 3702 loaded with 26 packages of Kraft paper. This truck was ready to leave the factory premises while the officers were checking the bonded store-room of the petitioner mills; the said truck No. MHB 3702 also left the factory ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clared by the petitioner by a national inclusion. It has further submitted that the price as declared by the Company in its price list has been approved by the Excise authorities for the purpose of assessable value under Section 4 of the Act. Once this price list is approved and the duty paid thereon by the Company after taking into account the benefit under the notification, the quantum of duty charged to the customer by the company, which is of the scheduled rate, is an irrelevant consideration for determining the assessable value. The duty which was charged, according to him, is a matter entirely between the customer and the company. 6. Mr. Bobde, learned Counsel for the petitioner further submitted that wherever excise duty is chargeable, ad valorem, the value of the goods must be determined first. It is only after such determination that it is possible to find out the amount of excise duty that is levied under the Act. According to him, this amount of excise duty is not and can never be a component of the value of the goods. As much as excise duty is not a component of the value fixed by the Central Government under Section 3(2) it cannot be a component of the value under Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uty "payable" on goods necessarily has a reference to the duty of excise payable on the goods by the assessee. Under Section 4(l)(a), for example, the normal price is described as the price at which such goods are ordinarily sold by the assessee in the course of wholesale trade. Similarly in Section 4(1)(a)(i) there is a reference to goods being sold by the assessee to different type of buyers. Sub-section (ii) also has a reference to goods sold by the assessee; as also sub-section (3). In the same manner in Section 4(4)(d)(ii) also the duty of excise payable on such goods must have a reference to the duty payable on such goods by the assessee. Excise duty payable by the assessee, therefore, may or may not be determinable only with reference to the tariff entry. If there is any exemption notification which applies either to the type of goods manufactured by the assessee or to the assessee by virtue of his being the type of manufacturer covered by the exemption, the duty of excise payable has to be computed with reference to such exemption notification also. The amount covered by Section 4(4)(d)(ii) is the amount of excise duty which is payable by the assessee on the goods in questi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f duty of excise (1) Where under this Act, the duty of excise is chargeable on any excisable with reference to value, such value shall, subject to the other provisions of this section, be deemed to be - (a) the normal price thereof, that is to say, the price at which such 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, where the buyer is not a related person and the price is the sole consideration for the sale : Provided that - (i) where .......................... such goods are sold by the assessee at different prices to different buyers etc. ................ (ii) where such goods are sold by the asessee in the course of wholesale trade for delivery at the time and place of removal at a price fixed under any law for the time being in force, or at a price being the maximum, fixed under any such law, then, notwithstanding anything contained in Clause (iii) of this proviso, the price or the maximum price, as the case may be, as fixed, shall, in relation to the goods so sold, be deemed to be the normal price thereof; (iii) where the assessee so arranges that the goods are generally not s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... herefore, the value for the purpose of excise duty is the normal price but not including the duty of excise payable. Normally the price under the Sale of Goods Act may contain several ingredients. It may consist of the cost of the raw material, cost of labour, cost of advertisement, cost of packing and so on. But excise duty is not levied on these different items. It is levied only on the normal price of the goods. But if such normal price includes excise duty payable then such amount of excise duty is to be excluded from the price for arriving at the value of the goods for the levy of the excise duty. We have already shown above that from Notification No. 128/1977, dated 18-6-1977 as also from the explanation to Section 4(4)(d)(ii) it is clear that when the effect of exemption notification is a reduction in the rate prescribed in the Act, it is the reduced rate of excise duty which is to be excluded under Section 4(4)(d)(ii). The explanation referred to above, in our view makes it clear that the exclusion under Section 4(4)(d)(ii) is only of the duty of excise as reduced by the exemption notification. Thus, in our view, the authorities below were justified in holding that what was ..... X X X X Extracts X X X X X X X X Extracts X X X X
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