Assessable value must follow genuine wholesale sale price; suspicion over reduced pricing cannot justify excise duty demand.

Under Section 4 of the Central Excise Act, 1944, assessable value is the price at which goods are actually sold in wholesale trade. A reduced sale price cannot be rejected merely because the manufacturer's commercial reasons appear unsatisfactory. In the absence of evidence that the reduced price was not genuine, that the goods were not sold at that price, or that additional consideration was received, the declared price must be accepted. Mere suspicion based on a fall in sales is insufficient to justify assessment on an earlier price. The reduced price was therefore treated as the assessable value and the duty demand failed.

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Issues: Whether the reduced sale price of the medicament could be rejected for assessing duty under Section 4 of the Central Excise Act, 1944 and whether the duty demand based on the earlier price was sustainable.

Analysis: The assessable value under Section 4 was the price at which the goods were sold in the course of wholesale trade. A lower price could not be discarded merely because the manufacturer's commercial reasons for reduction were considered unsatisfactory. In the absence of evidence that the reduced price was not genuine, that the goods were not actually sold at that price, or that the manufacturer had received additional consideration, the reduced price had to be accepted. Mere suspicion arising from a drop in sales was insufficient to sustain a demand.

Conclusion: The reduced price was accepted as the assessable value and the duty demand was unsustainable, in favour of the assessee.

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