TMI Blog1992 (7) TMI 161X X X X Extracts X X X X X X X X Extracts X X X X ..... er Section 11A for the period December 1987 to April 1990 seeking recovery of a sum of Rs. 3,14,70,136.64 on the grounds that they had failed to pay the proper Central Excise duty by not including the element of Modvat Credit availed on the inputs in the value of their final products. The aforesaid demands were confirmed by the Assistant Collector by his Order dated 29-6-1990. The respondents being aggrieved by the order passed by the Assistant Collector filed an appeal before the Collector (Appeals), Ahmedabad. In the impugned Order dated 20-12-1990 the Collector (Appeals) set aside the Order passed by the Assistant Collector on the grounds that having regard to the relevant provisions of the law there could be no justification to include ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Salt Act, 1944 as long as there is no allegation that the manufacturer and his wholesale dealer are related persons, the assessable value of the goods has to be wholesale price of the goods. He stated that in the case of his clients, the wholesale price as existing and declared was duly approved by the Department had to be accepted as the assessable value since there was no allegation that the buyers of the appellants were related persons. In this regard he placed reliance on the decision of the Hon ble Supreme Court in the case of M/s. Indian Oxygen Ltd. v. Collector of Central Excise, reported in 1988 (36) E.L.T. 723 (S.C.). He added that there was no justification whatsoever to include the Modvat Credit availed by the appellants in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r is allowed to utilise the duty paid on inputs, by deducting the same from the duty payable on the final product subject to following the procedure under the rules. It is only a benefit available to the manufacturer to utilise the duty paid on the inputs for payment of duty on the final product subject to the following the procedure under the rules. It does not directly effect or reduce the assessable value automatically. It is no doubt true that it will result in reduction in the cost of final product to the extent of the credit, but it does not automatically reduce the assessable value which is to be determined in accordance with Section 4. The assessable value has to be determined in accordance with Section 4 of the Act and Section 4 on ..... X X X X Extracts X X X X X X X X Extracts X X X X
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