S.C. Jain, Member (J)

1. This is a revision application filed before the Central Govt. (now transferred under Section 35P of the Central Excises and Salt Act, 1944) against the order-in-appeal No. 1656/80 dated 1-8-1980 passed by the Appellate Collector of Central Excise, Madras.

2. A perusal of the record shows that the appellants, who are manufacturers of Sodium Silicate are availing the exemption granted under notification No. 71/78, dated 1-3-1978 but while availing the duty exemption under the aforesaid notification, they did not pass it on to the buyers, nor did they pay duty so collected from the consumers to the government under these circumstances, the Assistant Collector of Central Excise treated the entire duty cum-value as assessable value and redetermined the total value for the purpose of exemption under Notification No. 71/78 and accordingly demanded the differential duty. The appeal before the Appellate Collector also failed.

3. Aggrieved by the said order of the authority below, the appellant firm preferred a revision petition before the Government of India and the same stands transferred to this Tribunal and is treated as an appeal.

4. We have heard Shri B.M. Patel, Partner of the Appellant firm and Smt. Vijay Zutshi, SDR for the department and have gone through the record.

5. As per the submissions made by Shri Patel, Partner of the appellant firm, in order to determine the excise duty leviable on the goods produced by a manufacturer it is necessary first to determine the assessable value under section 4 of the Act. It is only after the assessable value is determined that the excise duty leviable thereon is ascertained. To him, redetermination of the assessable value after taking into consideration the relief and exemption granted under Notification No. 71/78 dated 1-3-1978 is contrary to law. It is neither intended by the notification nor is practicable that the assessable value should be redetermined after giving effect to the relief and the exemption contemplated under the said notification. Where duty is calculated on the basis of Section 4 of the Act, the benefit of the duty is not required to be passed on to the consumers. He cited the decision of Delhi High Court in Modi Rubber Ltd. v. Union of India (1978 ELT J 127) and Anr. decision of Orissa High Court M/s. Bizi Industries v. Supdt of Central Excise and Anr. [ELT 109 (Orissa) in support of his contention. According to Shri Patel, the assessable value once fixed cannot be redetermined by the department unless there is a price revision or change in the duty. Redetermination of the assessable value and denying the full benefit to the appellant is against the Central Excise Rules.

6. Submission made by the Departmental Representative is that as per Section 4(4)(b)(ii) of the Central Excises Act "Value in relation to any excisable goods does not include the amount of excise duty, sales tax and other taxes payable on such goods". The words "duty payable" would mean the actual duty paid. Therefore, when the appellant has collected the full duty and has not paid that much amount of duty to the Government, the amount so retained by the appellant will naturally go to increase the assessable value, Our attention has also been drawn towards the fact that after the decision of the various High Courts on this point, in the year 1982 the Central Excise Act was amended by Clause 47 of the Finance Bill, 1982 retrospectively w.e.f. 1-10-1975 and as per this amendment the matter stands resolved inasmuch as the amount of money that can be taken as duty under the Central Excises and Salt Act, 1944 is the effective duty of excise only. As per the amendment, the ratio of the decision of the various High Courts on this point has now become irrelevant.

That Notification No. 71/78, dated 1-3-78 is intended to provide incentive for the manufacturer is not disputed. There is also no dispute that a notification for exemption has to be interpreted as it is worded. Exemption by no