Per Justice U.L. Bhat :

Collector of Central Excise is appellant in appeal E/432/89-A and M/s. Bajaj Auto Ltd. is the common appellant in the remaining appeals.

2. There were various controversies between the Department and the assessee, but we are concerned only with two among those controversies, namely, includability of excise duty in the assessable value for the purposes of determination of cess payable under Industrial (Development and Regulation) Act, 1951 and the deductibility of exempted sales-tax from the assessable value under Section 4 (4) (d) (ii) of the Central Excises Act, 1944.

3. The first question arises in appeal E/432/89-A and the second question arises in the other three appeals.

4. So far as the first question is concerned, the Tribunal has been consistently holding that for the purpose of determining cess under the Industrial (Development and Regulation) Act, 1951, excise duty payable would not be included in the assessable value. Therefore, the stand taken by the Assistant Collector is not sustainable and the view taken by the Collector (Appeals) is correct. However, in expressing the view, the Collector (Appeals) instead of using the word "exclusion" used the word "inclusion" in paragraph 4 of his order. This must obviously be a typographical error.

5. We are concerned in this case with the manufacture of scooters by the assessee at Aurangabad factory. Aurangabad district was a backward district. The State Government by order dated 4.5.1983 extended certain benefits to industries in backward areas. One of the benefits to industries in backward areas. One of the benefits was total exemption from payment of sales-tax under the State law. Assessee fully enjoyed the benefit of the exemption.

6. According to Section 4 (4) (d) (ii) of Central Excises Act, 1944, duty of excise, sales-tax and other taxes, if any, payable on such goods would not be part of the assessable value and consequently duty would not be payable on such element.

7. It is no doubt true, as contended by the learned counsel for the assessee, that under the basic sales-tax law obtaining in the State, sales-tax would be payable on the product manufactured by the assessee, namely, scooters. In fact, in respect of the scooters manufactured by the same assessee at their Pune factory, they were actually paying sales-tax. However, they were not paying sales-tax in respect of the scooters manufactured at the Aurangabad factory on account of the exemption granted by the State Government. According to the learned counsel for the assessee, when the statute prescribes sales-tax in respect of certain goods, sales-tax can be said to be payable even if by subsequent notification, payment is exempted. We are not able to agree with this contention. The expression used is "payable" and not "paid". Payability does not depend merely on the statutory provision but on due consideration of benefit of exemption which the Government may extend. Where the Government grants exemption in regard to sale of certain goods manufactured in certain areas by an order, it cannot be said that sales-tax is payable on such goods. We are supported in this view by an earlier decision of the Tribunal in Auto Controls Pvt. Ltd. vs. Collector of Central Excise, 1993 (63) ELT 156 (T).

8. Learned counsel for the assessee places reliance on a decision of the Tribunal in Collector of Central Excise vs. T.I. Millers Ltd. and another, 1991 (33) ECR 759 (T). This decision laid down merely that the provisions of MRTP Act may not help the Department, since it is well-settled that the definition given in one statute is for effectuating the provisions of the statute and not for effectuating the provisions of another statute. We do not think this decision has any bearing on the question under consideration in these appeals.

9. We hold that sales-tax on scooters manufactured by the assessee at Aurangabad factory was not payable under law and, therefore, the same cannot be deducted from the price decl