Excise valuation and clandestine clearance records must rest on reliable evidence, not uncorroborated assumptions or retracted statements.

Excise valuation of brake linings could not be re-determined on the basis of brand owners' sale prices or traders' quotations where there was no reliable evidence of authorised brand use, manufacture to brand specifications, or extra consideration over invoice price; the invoice price had to be accepted. Private register entries also could not be treated as sets of eight brake linings merely on an uncorroborated and retracted statement, especially where the records themselves and raw material position did not support that inference; the entries were to be read as individual brake linings. Duty and penalties therefore required recomputation on that basis.

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Issues: (i) Whether the value of the brake linings cleared under the brand names TVS and Rane, and of the other brand or unbranded goods, could be rejected and re-determined on the basis adopted by the department. (ii) Whether the production entries in the seized registers represented sets of brake linings of eight pieces each, or only the number of brake linings, for the purpose of quantifying the clearances.

Issue (i): Whether the value of the brake linings cleared under the brand names TVS and Rane, and of the other brand or unbranded goods, could be rejected and re-determined on the basis adopted by the department.

Analysis: The goods bearing TVS and Rane were treated as unauthorisedly used brand-name goods and therefore as duplicate goods, but there was no evidence of any agreement permitting use of those brand names or of manufacture to the brand owners' specification. In such a situation, valuing those goods at the price at which the brand owners sold their own products was held unjustified. As regards goods of other brands or unbranded goods, the invoice price could not be displaced merely on the basis of quotations from traders, in the absence of evidence that the assessee recovered any amount over and above the invoice price.

Conclusion: The valuation adopted by the department was not sustainable and the invoice price had to be adopted.

Issue (ii): Whether the production entries in the seized registers represented sets of brake linings of eight pieces each, or only the number of brake linings, for the purpose of quantifying the clearances.

Analysis: The registers did not themselves show that the figures were recorded in sets. The proprietor's earlier statement had been retracted, and the supervisor's statement was not corroborated and had not been tested by cross-examination. The claimed quantity also did not accord with the raw material position. On that material, the entries could not be treated as sets of eight brake linings each.

Conclusion: The entries were to be treated as the number of brake linings and not as sets.

Final Conclusion: The duty demand and consequential penalties required fresh quantification on the basis that the invoice price had to be accepted and the seized register entries represented individual brake linings, not sets; the matter was therefore sent back for recomputation.

Ratio Decidendi: In the absence of reliable corroborative evidence, excise valuation cannot be displaced by external price quotations or by the brand owner's price, and entries in private records cannot be converted into a higher unit of production merely on an uncorroborated and retracted statement.

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