B.P. Singh ORDER
1. The respondent is manufacturing motor vehicles and ithad availed of MODVAT credit of the duty paid on inputs underRule 57A of the Central Excise Rules. As it had not paid anyexcise duty on the raw material, it became liable to payexcise duty on the waste and scrap of aluminium and iron andsteel which scrap had been sold by the respondent.
2. The Collector raised a demand of excise duty on thewaste and scrap which was sold. The demand was challenged bythe respondent who contended that excise duty was not payable.Having been unsuccessful before the Collector, an appeal wasfiled before the Customs, Excise and Gold (Control) AppellateTribunal. The Tribunal by the impugned order came to theconclusion that excise duty was payable on the scrap sold bythe respondent. It further came to the conclusion that theprice on which the waste and scrap had been sold should beconsidered to be cum-duty price and the assessable valueshould be determined after deducting the element of exciseduty. It is this part of the decision of the Tribunal whichis sought to be challenged by the Revenue in this appeal.
3. The respondent had sold the scrap and according to itthe purchaser was not liable to pay any amount in additionthereto and it is for this reason the Tribunal regarded thistransaction as being one of cum-duty price.
4. Section 4 of the Central Excises and Salt Act, 1944provides for valuation of excisable goods for purpose ofcharging of duty of excise. Under Section 4(1), the duty ofexcise is chargeable on any excisable goods with reference tothe value which is deemed to be the price at which such goodsare ordinarily sold by the assessee to a buyer in the courseof wholesale trade where the buyer is not a related person andthe price is the sole consideration for the sale. Section 4(4)(d)(ii) states that value in relation to any excisablegoods does not include the amount of duty of excise, sales taxand other taxes, if any, payable on such goods and, subject tosuch rules as may be made, the trade discount., etc., is alsoto be allowed as a deduction.
5. A reading of the aforesaid Section clearly indicatesthat the wholesale price which is charged is deemed to be thevalue for the purpose of levy of excise duty, by the elementof excise duty, sales tax, or other taxes which is included inthe wholesale price is to be excluded in arriving at theexcisable value. This Section has been so construed by thisCourt in Asstt. Collector of Central Excise and Ors v. Bata India Ltd., 