Open-market sale price governs excise valuation where independent buyer sales data is available, not cost of production.

Steel strips partly sold in the open market to independent buyers were to be valued under section 4(1)(a) of the Central Excise Act, 1944 on the actual sale price, because relevant market-sale data was available and had been disclosed in the Rule 173C declaration. Where the goods were in fact sold to independent buyers, there was no basis to ignore the sale price and adopt cost of production under Rule 6(b)(ii) of the Central Excise (Valuation) Rules, 1975. The assessable value was therefore required to be taken from the open-market price, not production cost.

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Issues: Whether the assessable value of the steel strips sold to independent buyers was required to be adopted under section 4(1)(a) of the Central Excise Act, 1944, or could be determined on the basis of cost of production under Rule 6(b)(ii) of the Central Excise (Valuation) Rules, 1975.

Analysis: The goods were partly sold in the open market to independent buyers, and the assessee had disclosed in its declaration under Rule 173C the sale price of such goods as well as the assessable value for stock transfer. Since relevant data regarding the market sales was available, there was no basis to reject the sale price and resort to valuation on cost of production. The proper course was to assess the goods on the price at which the goods were actually sold in the open market.

Conclusion: The assessable value had to be taken on the basis of the price at which the goods were sold to independent buyers, and not on the basis of cost of production. The appeal was allowed in favour of the assessee.

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