Excise valuation must use wholesale price or retail price after deductions; full retail price cannot be adopted.

For excise valuation, assessable value must follow the statutory scheme under Section 4 of the Central Excise Act and Rule 6(a) of the Central Excise (Valuation) Rules, 1975: where wholesale price is available, it is the proper basis, and where retail price is used, prescribed deductions must first be allowed. Fixing assessable value at the full retail price without deductions is contrary to that scheme and cannot sustain a demand.

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Issues: Whether, for excise valuation, the assessable value could be fixed at the retail price without allowing deductions, instead of being determined on the basis of wholesale price or retail price less due deductions.

Analysis: Section 4 of the Central Excise Act and Rule 6(a) of the Central Excise (Valuation) Rules, 1975 contemplate assessable value as the wholesale price where available, and where valuation is to be derived from retail price, the retail price must be taken after making the prescribed deductions. Fixing assessable value at the full retail price, without such deductions, is contrary to the statutory scheme.

Conclusion: The demand based on retail price without deductions was unsustainable and was set aside; the assessee succeeded.

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