Excise valuation under the unamended law required factual inquiry, so show-cause notices could not be quashed at the threshold.

Excise valuation for a period before the 1996 amendment to Section 4 had to be tested under the unamended scheme, which valued goods by the normal wholesale price at the time and place of removal and, where necessary, by the nearest ascertainable equivalent. The High Court erred in quashing the show-cause notices at the threshold by relying on the later amendment, because the dispute depended on factual inquiry into normal price, transportation cost, place of removal and allowable deductions. The notices therefore could not be set aside at that stage, and the assessee was required to place its case before the competent authority.

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Issues: Whether the High Court was justified in quashing the excise duty show-cause notices at the stage of notice on the basis of amended valuation provisions, and whether the matter required remand for determination of the assessable value under the applicable valuation scheme.

Analysis: The dispute related to alleged short assessment of excise duty for a period prior to the 1996 amendment to Section 4 of the Central Excise and Salt Act, 1944. The governing valuation provision was therefore the unamended Section 4 as it stood during the relevant years. Under that provision, valuation depended on the normal price in wholesale trade at the time and place of removal, and where the price at the place of removal was not ascertainable, the nearest ascertainable equivalent had to be determined. The Court held that the High Court erred in setting aside the notices merely because the later amendment expressly referred to depots and different places of removal. The assessee had not placed the relevant factual material before the High Court regarding normal price, transportation cost, place of removal, or other deductions, and the controversy could not have been finally decided without such inquiry. The proper course was to leave the assessee to establish its case before the competent authority.

Conclusion: The show-cause notices could not be quashed at that stage and the matter had to be examined by the competent authority on the relevant facts and the unamended valuation provisions; the appeal succeeded.

Ratio Decidendi: A writ court should not finally determine excise valuation disputes at the show-cause stage where the governing statutory scheme requires factual ascertainment of normal price and related deductions under the applicable valuation provision.

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