Genuine ex-factory price and post-removal deductions govern depot valuation; artificial revaluation was not justified.

Genuine ex-factory sales to independent buyers, where an ascertainable factory gate price exists, must form the basis of assessable value for depot clearances; valuation cannot be shifted to depot price merely because depot sales are also made or factory sales are a small proportion, absent evidence that the factory gate price is artificial. Cash discount or sale rebate available to buyers is deductible, and post-removal expenses such as interest on receivables and freight from depot to buyers' premises cannot be included in assessable value. On that basis, the duty demand, interest and penalty based on depot valuation were not sustainable.

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Issues: (i) Whether the ex-factory price was genuine and could form the basis of assessable value for goods cleared from the depot; (ii) whether the assessee was entitled to deductions on cash discount or sale rebate, interest on receivables, and freight on sales.

Issue (i): Whether the ex-factory price was genuine and could form the basis of assessable value for goods cleared from the depot.

Analysis: The record showed factory gate sales to independent buyers and an ascertainable ex-factory price. The mere low percentage of factory gate sales, without documentary evidence that the factory gate price was artificial or bogus, was not a valid basis to reject that price. Where a genuine ex-factory price exists, valuation cannot be shifted to depot price merely because depot sales are also made.

Conclusion: The ex-factory price was genuine and had to be accepted as the basis of assessment for depot clearances.

Issue (ii): Whether the assessee was entitled to deductions on cash discount or sale rebate, interest on receivables, and freight on sales.

Analysis: Cash discount or sale rebate available to buyers is a permissible deduction. Interest on receivables is a post-removal expense and cannot form part of assessable value. Freight from depot to buyers' premises is likewise a post-removal expense and is deductible.

Conclusion: The assessee was entitled to the claimed abatements.

Final Conclusion: The duty demand, interest, and penalty based on depot valuation could not survive, and the assessee succeeded while the department's challenge failed.

Ratio Decidendi: Where genuine ex-factory sales exist and the price is ascertainable, assessable value must be based on that price and not on depot price, and post-removal expenses are deductible from valuation.

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