Factory-gate price controls excise valuation when available, even if sales volume is limited and depot pricing exists.

Where factory-gate sales exist, even in a small proportion, the factory-gate price is the proper basis for excise valuation of decorative block boards. A depot price cannot be substituted, and assessable value cannot be derived by taking the Delhi depot price and deducting post-manufacturing or selling expenses on a notional basis. The availability of an actual factory-gate price determines the valuation method, and limited volume of such sales does not justify moving to depot pricing.

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Issues: Whether, for valuation of decorative block boards, the assessable value was to be based on the prices available at the factory gate, or whether the price at the Delhi depot could be adopted and adjusted by deducting post-manufacturing expenses.

Analysis: The materials showed sales from the factory gate as well as from depots, with factory-gate sales existing though in a small proportion. Where a factory-gate price is available, that price forms the proper basis of assessment, and it is not permissible to substitute a depot price or to resort to a worked-out deduction of manufacturing and selling expenses merely because the factory-gate sales are limited in quantity.

Conclusion: The assessable value had to be determined on the basis of the factory-gate prices, and the adoption of the Delhi depot price was not justified.

Ratio Decidendi: If a factory-gate price is available, even in small volume, it must be taken as the basis for excise valuation rather than a depot price or a notional computation of deductions from such depot price.

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