Sale-price valuation controls for actually sold excisable goods; cost-based valuation cannot replace it without legal necessity.

Excisable goods actually sold at the realised tender price must be valued under the statutory sale-price basis where the declared price is not shown to be false, suppressed, or supported by additional consideration. Cost-based valuation under Rule 6(b)(ii) is available only when valuation on actual sale price cannot be applied. In relation to molasses, an incidental by-product of sugar manufacture, the attempt to derive cost by apportioning sugar production costs was rejected. The estimated cost-of-manufacture basis was therefore set aside and the sale-price valuation sustained.

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Issues: Whether the value of molasses cleared and sold by the manufacturer was to be determined under Section 4(1)(a) on the basis of the actual sale price, or whether recourse could be taken to cost-based valuation under Rule 6(b)(ii).

Analysis: The goods were admittedly sold to buyers at the prices realised in tender sales, and there was no allegation that the declared price was false, suppressed, or supplemented by any additional consideration. Where goods are sold, valuation must first be made under the statutory sale-price basis; resort to the cost-based rule is permissible only when that course is unavailable. The attempted reliance on the opinion of the Chief Sugar Technologist was also rejected, because molasses is an incidental by-product of sugar manufacture and its cost of manufacture cannot be sensibly derived by apportioning the cost of sugar production in the manner suggested.

Conclusion: The sale price was the proper basis for valuation, and Rule 6(b)(ii) could not be invoked. The appeal failed.

Final Conclusion: The assessment based on an estimated cost of manufacture was set aside, and the valuation adopted by the Commissioner (Appeals) was sustained.

Ratio Decidendi: Where excisable goods are actually sold and the declared price is not shown to be false or supplemented by additional consideration, valuation must be made on the sale price basis, and cost-based valuation cannot be applied merely on an about manufacturing cost.

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