Cir. No.222/56/1996-CX, dt. 21/06/1996
- Document type
- Circular
- Reference no.
- C
- Dated
Clarification on Section 4(4)(d)(ii) of CE rules to
Judgements of Supreme Court dt. 7.5.1996 in C.A.No. 8762 of 1994 in case of Assistant Commissioner Central Excise & Ors. v. Bata India and C.A. No. 1121 of 1992 in case of Modi Rubber Ltd. & Anr. v. UOI (with Civil Appeals Nos. 1965/86, 1966/ 86, 1967/ 86, 2328/86, 1059/ 81, 2393-2409/ 80, 1052/81, 285/88, 2155/87, 1415-16/86, 8178/95, 8263/95 and Civil Appeals Nos. 7848 and 7852 of 1996 (arising out of SLPs (c) Nos. 5881/86, 5882/86)).
2. Section 4(4)(d)(ii) of Central Excise & Salt Act, 1944 envisages that the taxes and the Central Excise duty payable should be deducted from the wholesale price for arriving at the assessable value which is the normal price charged by the manufacturers from the whole-sale dealers at the first point of sale. The parties had taken a view that the Central Excise duty payable means the rate of duty as prescribed in the First Schedule of the Act. However, the Department"s view had been that it is the actual amount of duty payable after taking the exemption notifications into account which is only to be deducted. The Supreme Court has categorically upheld the department"s view point and held that the adding of Explanation to Sec. 4(4) (d)(ii) by Act 14 of 1982, was only classificatory in nature without making any basic change in the legal position. The decision makes it amply clear that it is only the Central Excise duty actually payable after giving full effect to the exemption notification which is to be deducted from the wholesale price for arriving at the assessable value.
3. You are requested to take necessary action in implementing the decision and also intimate the amount of revenue likely to be realised in the above Civil appeals to enable us to quantify the revenue recoverable in all these 34 cases. You are also requested to take action to get the other cases covered by these judgements pending in other High Courts, ECGAT and other Appellate and Adjudication proceedings decided.
Sd/-
(Amitab Hajela)
Deputy Secretary (Legal)