Factory gate normal price governs billet valuation; extended limitation needs fresh scrutiny where price declarations were not considered.

Where an ascertainable factory gate normal price existed for billets, valuation under Section 4 of the Central Excise Act was to be based on that normal price even though part of the clearances were transferred to another unit; the stock transfer could not displace the available wholesale price, so the valuation challenge failed. On limitation, one demand was within the statutory period and the demand and penalty were sustained. In the other matter, the record did not show proper consideration of the assessee's price declaration for transfer clearances, so invocation of the extended period required fresh examination by the adjudicating authority. The valuation issue was upheld, while the limitation issue was remanded for reconsideration.

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Issues: (i) whether billets transferred to another unit were liable to be assessed on the basis of factory gate normal price where such price was available, and (ii) whether the demand for the later period was barred by limitation or required reconsideration in light of the price declaration filed by the assessee.

Issue (i): Whether billets transferred to another unit were liable to be assessed on the basis of factory gate normal price where such price was available.

Analysis: Section 4 of the Central Excise Act, 1944 requires valuation on the basis of the normal price, being the price at which the goods are ordinarily sold in wholesale trade at the place of removal where the buyer is not a related person and the price is the sole consideration. Since the factory gate sale price of the billets was available, the transfer to another unit could not be valued by treating the stock transfer as the governing price. The reasoning followed the principle that where an ascertainable normal price exists, valuation does not shift to a notional basis merely because part of the clearances are to a sister unit.

Conclusion: The goods transferred to the other unit were correctly assessable on the basis of the normal factory gate price, and the valuation challenge failed.

Issue (ii): Whether the demand for the later period was barred by limitation or required reconsideration in light of the price declaration filed by the assessee.

Analysis: For one appeal, the demand fell within the statutory period under Section 11A(1) of the Central Excise Act, 1944, so the demand and penalty were sustained. For the other appeal, the record did not show consideration of the assessee's price declaration regarding transfer clearances, and the question whether the extended period could be invoked depended on that factual and legal examination. That aspect required fresh scrutiny by the adjudicating authority.

Conclusion: The demand for the first period was upheld, while the limitation issue for the other period was remanded for reconsideration.

Final Conclusion: The valuation on the basis of factory gate normal price was sustained, but the limitation question in the second matter was left for fresh adjudication, resulting in partial relief only.

Ratio Decidendi: Where an ascertainable factory gate normal price exists, transfers to a sister unit are to be valued under Section 4 of the Central Excise Act, 1944, and invocation of the extended period of limitation must be tested against the assessee's declarations and disclosure of relevant facts.

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