Transaction value under excise law requires transaction-wise valuation; blanket percentage addition to invoice value is impermissible.

Excise duty valuation based on transaction value must be determined on the actual value of each removal where evidence suggests undervaluation and receipt of additional consideration. Loose slips, price lists, dealer and employee statements, and bank records may support a demand, but a blanket percentage mark-up across all clearances is legally impermissible when transaction-wise evidence is required. The extended limitation period under Section 11A may still apply where the record indicates suppression and evasion, even if departmental knowledge arose from search or investigation. The matter requires de novo determination of duty and penalties on a transaction-value basis, consistent with natural justice.

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Issues: (i) whether the demand could be sustained on the basis of loose slips, price lists, statements of dealers and employees, and bank records so as to justify valuation on a percentage mark-up across all clearances; (ii) whether the demand was barred by limitation under the extended period.

Issue (i): whether the demand could be sustained on the basis of loose slips, price lists, statements of dealers and employees, and bank records so as to justify valuation on a percentage mark-up across all clearances.

Analysis: The record contained material suggesting undervaluation and receipt of additional consideration over invoice value, and the initial statements recorded from the dealers and employees were treated as valid evidence, being corroborated by the recovered documents and bank records. However, for clearances made after the introduction of transaction value, duty had to be worked out on the actual transaction value of each removal. A uniform across-the-board enhancement by a fixed percentage was held to be legally inappropriate, as the assessable value could not be notionally determined by a generalised formula where transaction-wise evidence was required.

Conclusion: The Revenue case of undervaluation was not rejected in entirety, but the method adopted for quantification was unsustainable and required fresh determination on transaction-wise basis.

Issue (ii): whether the demand was barred by limitation under the extended period.

Analysis: The Tribunal held that knowledge of the department from the date of search or investigation did not control the computation of limitation under Section 11A. In the presence of material indicating suppression and evasion, the invocation of the extended period was treated as valid, and the plea of time bar was rejected.

Conclusion: The demand was not barred by limitation and the extended period was correctly invoked.

Final Conclusion: The impugned order was set aside and the matter was remanded for de novo determination of duty and penalties in accordance with the transaction value concept and principles of natural justice.

Ratio Decidendi: For clearances governed by transaction value, excise duty must be determined on the actual value of each removal on the basis of reliable evidence, and a blanket percentage addition to invoice value for all clearances is impermissible.

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