Depot clearance valuation follows the price at removal, and later higher sales do not justify revising assessable value.

For depot clearances, assessable value is determined by reference to the price applicable at the time goods are removed from the factory, not by a later higher resale price from the depot. The commentary notes that a binding departmental circular governing depot valuation must be applied where it covers the dispute, and that later depot sales do not by themselves justify revising the value already declared on removal. It also records that an attempted distinction between replacement market sales and original equipment sales was not supported by the circular or the precedent relied on for valuation.

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Issues: Whether the assessable value of tyres cleared from the factory to a depot was required to be revised on the basis of the higher price at which the goods were subsequently sold from the depot, and whether the Board's circular governing depot clearances applied to the dispute.

Analysis: The valuation dispute arose after the amendment of Section 4, under which goods cleared to a depot had to be valued with reference to the price at which such goods were sold from that depot on the date of clearance from the factory. The appellate authority had relied on the Board's circular and Tribunal precedent to hold that if the departmental circular supported the assessee, it had to be followed, and that subsequent depot sales at a higher price did not justify revising the assessable value already declared at the time of removal from the factory. The revenue's attempt to distinguish between replacement market sales and original equipment sales was rejected because no such distinction was shown in the circular or in the precedent applied by the appellate authority.

Conclusion: The assessable value was not required to be revised on the basis of subsequent higher depot sales, and the Board's circular remained applicable. The revenue's challenge failed.

Final Conclusion: The appellate order setting aside the duty demand, interest and penalty was sustained, and the revenue's appeal was dismissed.

Ratio Decidendi: Where goods are cleared to a depot, their assessable value is to be determined with reference to the price applicable at the time of removal, and a binding departmental circular covering the valuation method cannot be disregarded merely because the goods are later sold at a higher price from the depot.

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