COMMISSIONER OF CENTRAL EXCISE, DELHI versus M/S. MARUTI UDYOG LTD.

Citation: [2002] 2 S.C.R. 99 · Decided: 27-02-2002 · Supreme Court of India · Bench: B.N. KIRPAL · Disposal: Dismissed
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Judgment (excerpt)

COMMISSIONER OF CENTRAL EXCISE, DELHI 
A 
v. 
M/S. MARUTI UDYOG LTD. 
FEBRUARY 27, 2002 
[B.N. KIRPAL, SHIVARAJ V. PATIL AND 
B 
BISHESHWAR PRASAD SINGH, JJ.] 
Central Excises and Salt Act, 1944/Central Excise Rules, 1944. 
-i 
c 
Ss. 4(1) and 4(4)(d)(ii)/Rule 57-A-Sa/e if waste and scrap of aluminium 
and iron and steel-Assessable value for purposes of excise duty-Maruti 
Udyog-Manufacturing Motor vehicles-Availing MOD VAT credit of duty on 
import-Manufacturer selling waste and scrap of. aluminium and iron and 
steel-Tribunal holding that excise dutj was payable on waste and scrap sold 
and the price on which waste and scrap had been so/d"should be considered D 
to be cum-duty price and the assessable value should be determined after 
deducting the element of excise duty-Held, the sale price realised by the 
... 
manufacturer has to be regarded as the entire price inclusive of excise duty 
because it is the manufacturer who has by necessary implication taken on the 
liability to pay all the taxes on the goods sold and has not sought to realise 
any sum in addition to the price obtained by it from the purchaser-Tribunal E 
was right in directing that manufacturer is entitled to the benefit of s.4(4)(d)(ii). 
Asstt. Collector of Central Excise and Ors. v. Bata India ltd, [1996) 4 SCC 
~ 
563 and Hindustan Sugar Mills v. State of Rajasthan and Ors., [1978) 4 SCC 
271, relied on. 
F 
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 3783 of 
, 2000. 
From the Judgment and Order dated I 9. I l.99 of the Customs Excise 
and Gold (Control) Appellate Tribunal New Delhi in A. No. E/2051/93-
Bin F.O. No. 1251 of 1999-B. 
G 
-/ 
WITH 
Civil Appeal No. 660 of 2000. 
From the Judgment and Order dated 01.07.99 of the Customs Excise H 
99 
100 
SUPREME COURT REPORTS 
[2002] 2 S.C.R. · 
A and Gold (Control) Appellate Tribunal New Delhi in A. No. E/5419/92-
A in F.O. No. 945 of 1999-A. 
B 
WITH 
c: A. Nos. 3841, 5867-68/2000, 3913, 4082, 4455, 6072, 8455/2001 
and 92 of 2002. 
Mukul Rohtagi, Additional Solicitor General, Mahendra Anand, 
Sr. Adv., N.K. Bajpai, Jaideep Gupta, Ms. Nisha Bagchi, B. Krishna Prasad, 
V. Lakshmikumaran, M.P. Devanath, V. Balachandran, A.R. Madhav Rao, 
S.N. Mehrotra, Attar Singh, V.J. Francis, P.L Jose, Jenis, S. Nanda Kumar, · 
V. Vijayan, L.K. Pandey, Himanshu Munshi, Rajesh Kumar, M.L. Lahoty, 
C Paban K. Sharma, Himanshu Shekhar, Advs. with them for the appearing 
parties. 
The following Orders of the Court was delivered : 
The respondent is manufacturing motor vehicles and it had availed of 
D MODY AT credit of the duty paid on inputs under Rule 57 A of the Central 
Excise Rule~. As it had not paid any exicse duty on the raw material, it 
b7came liable to pay excise duty on the waste and scrap of aluminium and 
iron and steel which scrap had been sold by the respondent. 
The ColleCtor raised a demand of excise duty on the waste and scrap 
E which was sold. The demand was challenged by the respondent who contended 
that exicse duty was not payable. Having been unsuccessful before the 
Collector, an appeal was filed before the Customs, Excise and Gold (Control) 
Appellate Tribunal. The ·Tribunal by the impugned order came to the 
conclusion that excise duty was payable on the scrap sold by the respondent. 
F it further came· to the conclusion that the price on which the waste and scrap 
.had been sold should be considered to be cum-duty price and the assessable 
value should be determined after deducting the element of excise duty. It is 
this part of the decis~on of the Tribunal which is sought to be challenged by 
the Revenue·in this appeal. 
G 
The respondent had sold the scrap and according to it the purchaser 
was not liable to pay any amount in addition thereto and it is for this reason 
the Tribunal regarded this transaction as being one of cum-duty price. 
Section 4 of the Central Excises and Salt Act, 1944 provides for valuation 
of excisable goods for purposes of ch&rging of duty of excise. Under Section 
H 4(1), the duty of excise is chargeable on any excisable goods with reference 
COM MR. OF CENTRAL EXCISE v. MARUTI UDYOG LTD. 
I 0 I 
to the value which is deemed to be the price at which such goods are ordinarily A 
sold by the assessee to a buyer in the course of wholesale trade where the 
buyer is not a related person and the price is the sole consideration for the 
sale. Section 4(4)(d)(ii) states that value in relation to any excisable goods 
does not include the amount of duty of excis
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