Factory-gate wholesale price governs assessable value; bundling and strapping charges could not be added for depot sales.

Where goods were sold both at the factory gate and from depots, the ex-factory sale price was the normal wholesale price and formed the assessable value under Section 4(1)(a) of the Central Excise Act, 1944. On that basis, duty had already been correctly discharged, so the attempt to enhance depot-clearance valuation by adding bundling and strapping charges lacked legal foundation. The demand and penalty were therefore unsustainable and were set aside.

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Issues: Whether the assessable value of goods cleared from depots could be enhanced by including bundling and strapping charges when a part of the goods was admittedly sold ex-factory at the normal wholesale price.

Analysis: The goods were sold both at the factory gate and from depots, and the ex-factory sales represented the normal wholesale price. Under Section 4(1)(a) of the Central Excise Act, 1944, the normal wholesale price at the factory gate constituted the assessable value. Since duty had been correctly discharged on that basis, the additional demand founded on inclusion of bundling and strapping charges for depot sales had no legal basis.

Conclusion: The demand and penalty were unsustainable and were set aside. The appeal succeeded.

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