1990 (11) TMI 155

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..... I.T.C.) for manufacturing cigarettes for it to be sold under the brand name of I.T.C. The petitioner filed a price list and claimed that the assessable value of the cigarettes was at Rs. 2.50 per 1000 claiming those to be conversion charges received from the I.T.C. and requested the authorities to treat the conversion charges only as the assessable value under Sec. 4 of the Act for payment of duty. The Asstt. Collector of Central Excise, Hosur by his order dated 16-12-1982 did not agree and held that the value of the cigarettes had to be assessed on the basis of the value declared by I.T.C. in respect of similar brands of cigarettes manufactured by them and approved by the department from time to time. Aggrieved by that order, the petitione .....

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..... able value of the cigarettes manufactured by it and that its plea before the Assistant Collector that it had to be assessed only on the quantum of the conversion charges was mis-conceived. 4. We have given our anxious consideration to the respective contentions raised at the bar. 5. Taxable event under the excise law is the manufacture or production of the goods. The manufacture of taxable goods is by itself sufficient to attract excise duly and the obligation to pay excise duty arises on the manufacture of taxable goods. The department has, therefore, to recover the excise duty from the manufacturer, who is liable to be assessed on the basis of the actual assessable value of the cigarettes manufactured by it and not only on the basis of .....

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..... er's profit. That could not be done. The question as to what is the value at which the petitioners would be deemed to be selling the goods manufactured by it is essentially a question of fact to be determined by the assessing authority. The factors which are relevant for that determination have been spelt out by the Supreme Court in Ujagar Prints case [1989 (39) E.L.T. 439] (supra). The assessing authority was right in refusing to assess the petitioner only on the basis of "conversion charges", but it failed to arrive at the assessable value after taking the relevant factors into consideration. The assessing authority has to determine the "selling price" of the cigarettes at the hands of the petitioners to determine the actual assessable va .....

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