Excise valuation at factory gate depends on wholesale cash price, not buyers' resale price, absent special arrangements.

For excise valuation under Section 4 of the Central Excises and Salt Act, the relevant assessable value is the wholesale cash price at the factory gate, confined to manufacturing cost and manufacturing profit and excluding post-manufacturing elements such as selling profit. Bulk sales to customer companies under long-term commercial arrangements did not, by themselves, lose their wholesale character, and the Department could not substitute the buyers' resale price absent evidence of secret arrangements, understatement, or extra-commercial advantage. The text also states that relief was declined against the earliest excise order because it was not challenged within a reasonable time and was treated as acquiesced in.

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Issues: (i) Whether the ex-factory price charged by the manufacturer to its customer companies constituted the wholesale cash price for the purpose of valuation under Section 4 of the Central Excises and Salt Act; (ii) whether relief could be denied in respect of the earliest excise order on the ground of delay and acquiescence.

Issue (i): Whether the ex-factory price charged by the manufacturer to its customer companies constituted the wholesale cash price for the purpose of valuation under Section 4 of the Central Excises and Salt Act.

Analysis: The valuation provision required the real value of the goods to be confined to manufacturing cost and manufacturing profit, excluding post-manufacturing elements such as selling profit. The sales to the customer companies were bulk sales at the manufacturer's ex-factory price, and the existence of long-term commercial arrangements did not by itself deprive those sales of their wholesale character. No material showed any secret arrangement, understatement of price, or extra-commercial advantage that would displace the ex-factory price as the relevant wholesale cash price. The Department's treatment of the customer companies' resale price as the manufacturer's assessable value was therefore unsustainable.

Conclusion: The ex-factory price was the wholesale cash price, and the valuation adopted by the Department could not stand; this issue was decided in favour of the assessee.

Issue (ii): Whether relief could be denied in respect of the earliest excise order on the ground of delay and acquiescence.

Analysis: The earliest order was not challenged within a reasonable time, and the writ petition disclosed no explanation for the failure to assail that order promptly. The petitioner had allowed that order to remain unquestioned for a substantial period, which showed acquiescence in that limited respect.

Conclusion: Relief was declined in respect of the earliest order on the ground of delay and acquiescence.

Final Conclusion: The writ petition succeeded substantially, with the impugned later valuation orders being quashed and consequential refund relief granted, but no relief was granted against the earliest unchallenged order.

Ratio Decidendi: For excise valuation under Section 4, the relevant price is the wholesale cash price at the time and place of sale, confined to manufacturing cost and manufacturing profit, and it is not displaced merely because the goods are sold under long-term commercial arrangements or later resold at higher prices by connected buyers.

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