Valuation of excisable goods sold to related and independent buyers must follow independent buyer price, with demand re-quantified on remand.

Where excisable goods were sold both to related persons and to independent buyers, Rule 4 required assessable value to be based on the price charged to independent buyers for the same goods. The Tribunal followed its own earlier view and supporting appellate precedent, and held that valuation had to be reworked on that basis. As the record also required verification of whether duty had already been discharged on the independent buyer price, the matter was remanded for fresh quantification after hearing the assessee.

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Issues: Whether, for valuation of excisable goods sold to related persons and independent buyers, the assessable value was required to be determined on the basis of the price at which the goods were sold to independent buyers, and whether the demand required re-quantification on that basis.

Analysis: The goods were admittedly sold both to related persons and to independent buyers. In such a situation, Rule 4 required adoption of the price at which the same goods were sold to independent buyers for determining the value of clearances. The Tribunal followed the view already taken in the assessee's own case and the supporting appellate precedent, and held that valuation had to be worked out on the independent buyer price. Since the factual question whether duty had already been discharged on that basis required verification, the matter was sent back for fresh quantification after hearing the assessee.

Conclusion: The valuation issue was decided in favour of the assessee, and the duty demand was directed to be reworked on remand.

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