TMI Blog2004 (1) TMI 77X X X X Extracts X X X X X X X X Extracts X X X X ..... [Order]. - This Appeal is against the Order dated 12th January, 1998 of the Customs, Excise Gold (Control) Appellate Tribunal. 2. Briefly stated, the facts are as follows : Prior to 1st March, 1979, duty was levied on un-manufactured tobacco. With effect from 1st March, 1979, that duty was withdrawn. A Notification bearing No. 30/79-C.E., dated 1st March, 1979 was issued which, inter alia, provided as follows : "In exercise of the powers conferred by sub-rule (1) of Rule 8 of the Central Excise Rules, 1944, read with sub-section (3) of Section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957 (58 of 1957) (hereinafter referred to as the Additional Duties of Excise Act), the Central Government hereby exempts cigarettes of the description specified in column (1) of the Table hereto annexed, and falling under sub-item II(2) of Item No. 4 of the First Schedule to the Central Excises and Salt Act, 1944 (1 of 1944) (hereinafter referred to as the Central Excises Act), from so much of the duty of excise leviable thereon both under the Central Excises Act and the Additional Duties of Excise Act, as is in excess of the duty specified in the corresponding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lue of Cigarettes from selling price by Manufacturer to W/B by using duty paid raw-tobacco or fully exempt raw-tobacco Narration GTC/Department's point GTC's point of view Department's point of view (Cigarettes made out of non-duty paid tobacco) (Cigarettes made out of duty paid tobacco) (Cigarettes made out of duty paid tobacco) Rupees Rupees Rupees A W/B price inclusive of PME for 1000 Cig. 85.600 85.600 85.600 B Less 0.72% PME 0.616 0.616 0.616 C CUM DUTY PRICE 84.984 84.984 84.984 D Specific Rate of Duty 21.000 21.000 15.500 (Rs. 21 - Rs. 5.5)* E AV + Ad valorem 63.984 63.984 69.484 F Assessable Value of 1000 Cig. 18.281 18.281 19.852 G Ad valorem Duty @ 250% 45.703 45.703 49.632 H Duty payable on 1000 cig. i.e. D + G 66.703 66.703 65.132 5.500 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 4(4)(d) specifically provides that the duty payable is to be reduced to that set out in the Notification granting exemption provided the Notification does not grant exemption for giving credit or deduces the rate of duty. It was submitted that as per Explanation 1 to Section 4(4)(d) Notifications which grant exemption are to be taken into consideration but Notifications reducing rate of duty are not to be considered for arriving at the assessable value. It is submitted therefore that the first portion of Notification bearing No. 30/79 provides exemption and thus this must be taken into consideration in arriving at the assessable value. It is submitted that thus the higher slab would be 400% plus Rs. 21/-. According to the Appellants the sum of Rs. 21/- must, therefore, be deducted whilst calculating the assessable value and thereafter, at the time of levy of duty, a sum of Rs. 5.50/- has to be deducted. 8. In support of their submission reliance was placed upon the case in Kirloskar Brothers Ltd. v. Union of India reported in 1992 (59) E.L.T. 3 (S.C.). In this case it was held that the deduction had to be made at the time of payment of duty and not at the time of arrivi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tical submission was negatived and it has been held as follows :- "6. We are unable to uphold this contention because the normal price charged by the manufacturer at the time and place of removal of goods to the wholesaler is treated by the Act to be the value of the goods. Sub-section 1(a) of Section 4 makes it clear that "such value shall ……. be deemed to be 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...". Therefore, the normal wholesale price of the goods must be deemed to be the value of the goods. It is not necessary to refer to the various types of prices that may be charged from the buyer set out in the proviso to Section 4(1)(a). But there cannot be any dispute that excise duty will be levied on the value of the excisable goods and the basic rule is that the normal wholesale price is the value of the goods. The normal wholesale price is the cum-duty price which the wholesaler has to pay to the manufacturer. The cost of production, estimated profit and the taxes on manufacture and sale of the goods are usually included in the wholesale price of the goods. It is only ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o submit a price list to the excise authority before removal of the goods from the factory. He has to indicate in the forms and documents relating to assessment, the value of the goods and the amount of duty which will form part of the prices at which such goods are to be sold. Costs and estimated profits are included in the price of the goods. Inclusion of the anticipated amount of the excise duty in the wholesale price is the last part of the pricing mechanism. The manufacturer has to calculate the value on which duty would be payable, estimate the amount of duty payable and add that amount to the value of the goods to arrive at the wholesale price. It is on the value of the goods and not the cum-duty price that the duty is paid to the excise authority before the clearance of the goods. If, as in this case, before adding any amount by way of excise duty, the manufacturer found that the value of the footwear was Rs. 60.00 per pair or less, no question of payment of excise duty could arise. There was no necessity to add anything on account of tax to raise the price of the goods to above Rs. 60.00 per pair. The wholesale price of Rs. 62.00, Rs. 64.00 and Rs. 66.00 given in the chart ..... X X X X Extracts X X X X X X X X Extracts X X X X
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