( 1 ) THIS is an appeal by the Bata Shoe Company Private Limited from the judgment and order of P. K. Banerjee J. dated September 25, 1970, in Civil Revision Case No. 297 (W) of 1970. ( 2 ) THE grounds taken in the appeal are that the learned Judge erred in interpretation of the intent and scope of Section 4 and the Explanation thereto of the Central Excise and Salt Act of 1944 and the rules made thereunder. The essence of that allegation is that under the provisions of Section 4 of the Central Excise and Salt Act, the "value" of any article must first be determined after deducting the trade discount allowance and the amount of duty payable from the wholesale cash price. It is also alleged that the learned Judge was in error in so far as Item No. 36 of the first Schedule to the Central Excises and Salt Act, 1944, indicates that duty will paid ad valorem on footwear and therefore it was imperative first to arrive at the "value" in terms and in the manner prescribed under Section 4 of the Act and then only could it be seen whether such value was below Rs. 5/- so as to qualify for the exemption under the notification. ( 3 ) THERE is also a cross-objection by the respondents - the Collector of Central Excise, the Superintendent of Central Excise and the Union of India. In the cross-objection, the grounds are that the learned Judge was wrong in holding that the demands for payment of duty made in the notice annexed to the writ petition were barred by lapse of time and were not recoverable and in holding that the period of limitation was three months. It is their contention that the learned Judge should have held that the demands were made all within time and he ought not to have directed the issue of the writs in the nature of mandamus and certiorari. ( 4 ) THERE are three notifications which are material and relevant. It is their contention that the learned Judge should have held that the demands were made all within time and he ought not to have directed the issue of the writs in the nature of mandamus and certiorari. ( 4 ) THERE are three notifications which are material and relevant. One is G. S. R. 360 dated the 28th February, 1965, whereby under Rule 8 (1) of the Central Excise Rules of 1944, the Central Government exempted excisable goods specified in column (3) of the Table annexed thereto and falling under the items specified in the corresponding entry in column (2) of the said Table of the first Schedule to the Central Excises and Salt Act, 1944, from so much of the duty of excise leviable thereon under the said Act as is in excess of the duty specified and subject to the conditions laid down in the corresponding entries in columns (4) and (5) of the said Table. Serial No. 13 and Item No. 36 describes the exemption relating to "footwear and parts thereof". Their duty was said to be nil. In other words, there was no excise duty on foot wear and parts thereof by his notification. In the second notification G. S. R. 804 dated the 26th May, 1967, in exercise of the powers conferred by Rule 8 (1) of the Central Excise Rules 1944, the Central Government made the following further amendment in the notification of the Government of India in the Ministry of Finance (Department of Revenue) No. 24/65 Central Excise, dated the 28th February, 1965, to the effect that "in the said notification, in the Table, the entries against Serial No. 13 relating to Item No. 36 shall be omitted". That means that the full excise duty was re-imposed again on "footwear and parts thereof". ( 5 ) NOW, the third notification is dated the 24th July, 1967 - G. S. R. which says that "in exercise of the powers conferred by sub-rule (1) of rule 8 of the Central Excise Rules, 1944, the Central Government hereby exempts, with effect from the 26th May, 1967, footwear falling under Item No. 36 of the First Schedule to the Central Excise and Salt Act, 1944, of which the value does not exceed Rs. 5. 00 per pair, from the whole of the duty of excise leviable thereon". 5. 00 per pair, from the whole of the duty of excise leviable thereon". It is on this notification that really the question in the appeal arises. ( 6 ) WHAT the meaning of the words - "the value does not exceed Rs. 5. 00 per pair" - is the question raised. How is such a "value" to be determined ? Whether Section 4 of the Central Excises and Salt Act, 1944 which is a method followed for "determination of value for the purposes of duty" should be applicable to the present case or whether the "value" in the notification would include excise duty because it is not the value "for the purposes of duty". ( 7 ) NOW, the power of exemption is authorized by Rule 8 of the Central Excise Rules 1944. It runs as follows:"8. Power to authorize exemption from duty in special cases - (1) The Central Government may, from time to time, by notification in the Official Gazette, exempt subject to such conditions as may be specified in the notification any excisable goods from the whole or any part of duty leviable on such goods. (2) The Central Board of Revenue may by special order in each case exempt from the payment of duty, under circumstances of an exceptional nature any excisable goods. The effect of these Rules including Rule 8 is stated in Section 38 of the Central Excises and Salt Act, 1944. Section 38 of the Act provides as follows:"38. PUBLICATION of rules and notifications. All rules made and notifications issued under this Act shall be made and issued by publication in the official Gazette. All such rules and notifications shall thereupon have effect as if enacted in this Act". ( 8 ) THERE is a proviso to the Rule which is not applicable in the instant appeal. The effect is that upon the publication in the official gazette, these Rules and notifications, have the same effect as if enacted in this Act itself. The power to exempt the goods from duty is specially provided in Section 37 (2) (XVII) which says that "the Central Government may make rules to carry into effect the purpose of this Act, and in particular, and without prejudice to the generality of the foregoing power such rules may exempt any goods from the whole or any part of the duty imposed by this Act". ( 9 ) SECTION 4 of the Central Excises and Salt Act, 1944, occurs in Chapter II of the statute dealing with the special heading "levy and Collection of Duty". It contains ten sections from 3 to 12. First it sets out the duties specified in the first schedule to be levied in section 3. Next it relates to "determination of value for the purposes of duty" in section 4. Sections 6 and 7 deal with certain operations to be subjected to licence and form and conditions of such licence. Section 8 deals with the restriction on possession of goods specified in second schedule. Section 9 relates to offences and penalties. Section 10 confers power on Courts to order forfeitures. Section 11 deals with the recovery of sums due to Government and section 12 deals with the application of the provisions of Act VIII of 1878 to Central Excise Duties. That context does not deal with the exemption from duty. ( 10 ) DETERMINATION of value for the purposes of duty - Where under this Act, any article is chargeable with duty at a rate dependent on the value of the article, such value shall be deemed to be - (A) the wholesale cash price for which an article of the like kind and quality is sold or is capable of being sold at the time of the removal of the article chargeable with duty from the factory or any other premises of manufacture or production for delivery at the place of manufacture or production, or if a wholesale market does not exist for such article at such place, at the nearest place where such market exists". (B) [not relevant] explanation - In determining the price of any article under this section no abatement of deduction shall be allowed except in respect of trade discount and the amount of duty payable at the time of the removal of the article chargeable with duty from the factory or other premises aforesaid". There are certain dominant ideas in that section 4. The section applies when an article is chargeable with duty at a rate dependent on the value of the article. This is case of ad valorem duty. The second dominant ides is that the formula for value is a deemed formula, because it is said to be "such value shall be deemed to be". The section applies when an article is chargeable with duty at a rate dependent on the value of the article. This is case of ad valorem duty. The second dominant ides is that the formula for value is a deemed formula, because it is said to be "such value shall be deemed to be". It is not the real value but the deemed value or it is not the actual value but the value without the discount or duty. The third dominant idea of the section is that the basis for the value is the wholesale cash price. The fourth dominant idea is the calculation of the cash price which is said of an article of the like kind and quality sold or is capable of being sold. The fifth dominant idea is the time and this section 4 significantly says "sold at the time of the removal of the article chargeable with duty from the factory or any other premises as aforesaid". The last dominant idea is the place where this is to be sold, and that is the wholesale market. Section 4 seems to have the six dominant ideas imprinted on the body of the section. ( 11 ) THEN follows the Explanation. In the Explanation there are certain features which again requires to be carefully noticed. In the first place, it says that in determining the wholesale cash price, "no abatement or deduction shall be allowed". It starts with a general statement that no abatement or deduction shall be allowed. In the second place, it proceeds to make two exceptions to this, first, in respect of trade discount, and, secondly, for the amount of duty payable at the time of the removal of the article chargeable with duty from the factory or other premises. These are the two deductions permissible under the Explanation. ( 12 ) BEARING those considerations in mind, it follows that the "value" of the article is to be determined for purposes of duty on the wholesale cash price. Such wholesale cash price is the market value. Such market value would necessarily imply payment of all duties and the price that occurs after paying such duty at the market. The saleability of the article in open market presumes market price after its duty has been paid. Such wholesale cash price is the market value. Such market value would necessarily imply payment of all duties and the price that occurs after paying such duty at the market. The saleability of the article in open market presumes market price after its duty has been paid. ( 13 ) AS the Supreme Court has held in (1) British India Corporation Ltd. v. Collector of Central Excise, Allahabad and others, A. I. R. 1963 S. C. 104 at page 106:"an Excise Duty is a duty on production and though according to the economists, it is an indirect tax capable of being passed on to the consumer as part of the price yet the mere passing on of the duty is not its essential characteristic. Even if borne by the producer or manufacturer it does not cease to be a duty of excise". In (2) South Bihar Sugar Mills Ltd. and another v. Union of India and another, A. I. R. 1968 S. C. 922, the Supreme Court considered the expressions "manufacture" and "goods" used in section 3 and section 2 (f) of the Act and held:"the Act charges duty on manufacture of goods. The word "manufacture" implies a change but every change in the raw material is not manufacture". That is why it is often said that excise duty is not a tax, but a tax which operates on goods in existence. The emphasis is that the duty of excise is primarily a duty levied on a manufacturer or producer in respect of the commodity. SECTION 3 of the Act is a charging section and provides: "there shall be levied and collected in such manner as may be prescribed duties of excise on all excisable goods * * * which are produced or manufactured in India???"now, "prescribed" means prescribed by rule made under this Act. That is section 2 (g) of the Act. SECTION 3 of the Act is a charging section and provides: "there shall be levied and collected in such manner as may be prescribed duties of excise on all excisable goods * * * which are produced or manufactured in India???"now, "prescribed" means prescribed by rule made under this Act. That is section 2 (g) of the Act. ( 14 ) IN (3) Bata Shoe Company Private Limited v. The Collector of Central Excise, Patna and others, (Civil Writ Jurisdiction Case No. 1330 of 1970), a Bench of the Patna High Court had occasion to decide the same question and came to a conclusion other than and different from that arrived by P. K. Banerjee, J. P. K. Banerjee J. 's judgment was given earlier and the Patna High Court judgment was given later, so that the Patna High Court had the benefit to have that alternative view of this High Court. THE Patna High Court came to the view: "the reason is that the liability to excise duty is not determined upon the wholesale price. It is determined upon the assessable value, and the wholesale price is only a basis for arriving at the assessable value, which has to be worked out in accordance with a formula embodied in section 4 of the Act. That formula does not stand amended or abrogated by the notification of the 24th July, 1967. Nor does the formula contemplate a dissection of the constituents of the wholesale price before allowing the deductions contemplated in the Explanation to section 4 I further think that in proceeding to apply that formula for arriving at the assessable value of a particular category of footwear, it would not be right to start with any presumption that it has qualified for exemption by reason of its assessable value. Rather one must first determine its assessable value and then see whether it falls within the exemption or not. Rather one must first determine its assessable value and then see whether it falls within the exemption or not. * * * In other words, while dealing with the question of deduction of the duty element from the wholesale price as contemplated by the Explanation to section 4, that factor cannot be left out of consideration on the ground that that particular variety of footwear may ultimately be found to have qualified for exemption from excise duty in terms of the said notification * * * * In other words, the duty element has got to be deducted from the wholesale price regardless of any consideration whether in doing so the assessable value will fall within the exemption limit or not". But, then, argument does not give weight to the words "the amount of duty payable at the time of the removal of the article chargeable with duty" which occurs in the Explanation to section 4. The contention on behalf of the Government is that there can be no deduction of the duty element unless it is found that the duty is payable on the article in question. But that argument did not find favour with the Patna High Court. The Patna High Court on the other hand emphasized the words "chargeable with duty" in the Explanation to section 4 and construed the words "the amount of duty payable of the article", as merely descriptive of the true nature of the duty and the stage when it is payable. On the other hand, P. K. Banerjee J. has held that the import of the words "the amount of duty payable at the time of the removal of the article chargeable with duty from the factory", which occurs in the Explanation to section 4 is that unless the duty is paid in respect of any article, no duty is admissible. ( 15 ) AS at present advised, I am not convinced that the Patna view that "the amount of duty payable at the time of the removal of the article" is merely descriptive of the true nature of the duty and at the stage in which it is payable, is correct. ( 15 ) AS at present advised, I am not convinced that the Patna view that "the amount of duty payable at the time of the removal of the article" is merely descriptive of the true nature of the duty and at the stage in which it is payable, is correct. ( 16 ) NOW, at this stage it is necessary to refer to the notification of the 24th July, 1967, which says"in exercise of the powers conferred by Sub-rule (1) rule 8 of the Central Excise Rules, 1944, the Central Government hereby exempts, with effect from the 26th May, 1967, footwear falling under Item No. 36 of the first schedule to the Central Excises and Salt Act, 1944 (1 of 1944) of which the value does not exceed Rs. 5. 00 per pair, from the whole of the duty of exercise leviable thereon. ( 17 ) NOW, this is clearly an exemption granted. For purposes of exemption I am not convinced that the same principle for "determination of value for the purposes of duty" as laid down in section 4 should be applied. It is not that "value" within the meaning of section 4 of the Act. It is that "value" within the meaning of Rule 8 of the Central Excise Rules, 1944, which gives the Central Government the power by notification to exempt "any excisable goods from the whole or any part of duty leviable on such goods". This being a Rule, it has the effect of a statute by virtue of section 38 of the Act which says that all such Rules and notifications upon being made and published in the official gazette shall have the effect as if enacted in this Act. ( 18 ) THE words, therefore, in Rule 8 are material and should in our view be decisive. What is exempted is "the whole or any part of duty leviable on such goods". Unless the duty is levied, the exemption cannot be granted. Therefore, I am of the opinion that after the levy of the duty if the value of the goods is below Rs. 500/- then alone it is exempted. What is exempted is "the whole or any part of duty leviable on such goods". Unless the duty is levied, the exemption cannot be granted. Therefore, I am of the opinion that after the levy of the duty if the value of the goods is below Rs. 500/- then alone it is exempted. To take the view which the Patna High Court does, "the liability to excise duty is not to be determined upon the wholesale cash price", is to apply the same meaning to the word "value" in the notification of exemption dated the 24th July, 1967, and to the "value" in section 4 of the Act and in the Explanation thereto. As at present advised, I do not see any warrant for it. All that section 4 of the Act does is to lay down the formula or the principle for "determination of value the purposes of duty". It does not lay down any principle or formula for the determination of the value for exemption from duty. Somehow or other, the position of the appellants is that they are claiming exemption upon exemption. They are allowing duty to be exempted once from the value of the goods for the determination of value for the purposes of duty and again they are deducting the value of the duty for the purposes of exemption from duty. I think it is an untenable position. ( 19 ) IN (4) rd Motor Company of India Limited v. Secretary of State for India in Council, 75 I. A. 32, the Privy Council, 65 I. A. 32, the Privy Council had occasion to discuss a point which has a ring of similarity with the point that is under appeal. The Ford Motor Company sold the vehicles only to authorised dealers or distributors, each of whom was the sole agent for or retail seller of the vehicles in a particular district. The retail price charged by the distributors to the public was that stated in a price list issued by the Ford Motor Company and current at the time of the arrival of the vehicles in India, and the price payable by the distributors to the Ford Motor Company was the same price less a discount of 20 percent. The distributors had to pay that price before obtaining delivery, which was given "free on rail. The distributors had to pay that price before obtaining delivery, which was given "free on rail. " On arrival in India the vehicles were not completely assembled, and were so delivered to the distributors, an agreed allowance against the price being made by the appellants. It was held on those facts that the price charged by the appellants to the distributors, excluding the assembling allowance, was the "wholesale cash price, less trade discount" for which the vehicles were sold "at the time and place of importation" within the meaning of S. 30 cl. (a) of the Indian Sea Customs Act (VIII of 197), and that customs duty was accordingly payable by the appellants. It was held on those facts that the price charged by the appellants to the distributors, excluding the assembling allowance, was the "wholesale cash price, less trade discount" for which the vehicles were sold "at the time and place of importation" within the meaning of S. 30 cl. (a) of the Indian Sea Customs Act (VIII of 1878), and that customs duty was accordingly payable by the appellants on that 'real value" under the Second Schedule to the Indian Tariff Act. There the appellants' price to the distributors was a cash price, and the vehicles being invoiced a few days before the arrival of the ship and the price being fixed only then, the sales were made 'at the time and place of importation", and a sale at the port of entry with delivery "free on rail" complied with a reasonable interpretation of "at the time and place of importation". If there was an actual price for the goods themselves at the time and place of importation, and if it was a "wholesale cash price, less trade discount", cl. (a) of section 30 of the Act of 1878 was not inapplicable for want of sales of other goods of the like kind and quality, and the price obtained for the goods themselves could correctly represent the price obtainable for goods of the like kind and quality at the time and place of importation. It was therefore held that the wholesale price obtainable was, by reason of the appellants' organization and business methods, higher than it would otherwise have been, was not a ground of exemption under cl. (a) of section 30 of the Sea Customs Act. It was therefore held that the wholesale price obtainable was, by reason of the appellants' organization and business methods, higher than it would otherwise have been, was not a ground of exemption under cl. (a) of section 30 of the Sea Customs Act. The observations of Sir George Rankin at pages 42 and 43 of the report are relevant on the point. ( 20 ) IN (5) Collector of Central Excise and others v. Shankarlal Agarwalla, and Iinanath Agarwalla A. I. R. 1968 Cal. 154, the expression "wholesale price" was construed. In (6) National Tobacco Co. of India Ltd. v. Collector of Central Excise and other, A. I. R. 1961 Cal. 477, it was held that the determination of excise duty in terms of section 4 of the Act, depends on the determination of the value for the purpose of duty, for the calculation of which there are three facts, (1) the location where the calculation is to be made, (2) the time at which the calculation should be made and (3) the method of calculation. ( 21 ) THEREFORE, I have come to the conclusion which I am setting in a few words. Construing section 4 of the Act it means "determination of value for the purposes of duty". It does not mean determination of value for the purposes of "exemption from duty". Therefore, the "value" in section 4 of different from the "value" in the notification for exemption. Besides, section 3 of the Act lays down that "there shall be levied and collected in such manner as may be prescribed duties of excise on all excisable goods". The word "prescribed" means prescribed by the Rules made under the Act within the meaning of section 2 (g) of the Act. Under Rule 8 of the Central Excise Rules, exemption is granted in respect of excisable goods from the whole or any part of duty leviable on such goods. That means that the goods should be both "excisable goods" and be "leviable" with the duty. Therefore, the "value" for purposes of exemption from duty is the real actual value after the duty has been paid and calculated and not the deemed value of section 4 of the Act "for the purposes of duty". Rule 8 of the Central Excise Rules is a part of the Act by virtue of section 38 of the Central Excises and Salt Act, 1944. Rule 8 of the Central Excise Rules is a part of the Act by virtue of section 38 of the Central Excises and Salt Act, 1944. ( 22 ) IN that view of the mater I dismiss this appeal. The order of the learned Judge is upheld in its entirety including his observations on matters covered by the cross-objection. The cross-objection is dismissed. There will be no order as to costs in this appeal and the cross-objection. There will be stay of operation of this judgment and the interim order granted by the Appeal Court will granted by the Appeal Court will continue until the31st January, 1972. S. K. Mukherjee, J. : I agree. Appeal dismissed.