Excise valuation must rest on bona fide wholesale cash price, not a controlled price treated as conclusive.

For excise valuation under section 4 of the Central Excises and Salt Act, the assessable value must be the bona fide wholesale cash price realised or realisable at the time of removal. A statutory maximum price fixed under the Essential Commodities regime is relevant only as a circumstance; it is not conclusive of value and cannot replace the independent inquiry required by excise law. The Supreme Court held that the authorities erred by treating the controlled price as determinative, and the assessment orders were unsustainable. Reassessment was directed on the correct legal basis.

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Issues: Whether, for the purpose of valuation under section 4 of the Central Excises and Salt Act, 1944, the excise authorities were bound to adopt the maximum controlled price fixed under the Essential Commodities regime, even when the goods were actually sold at a lower bona fide wholesale cash price.

Analysis: Section 4 of the Central Excises and Salt Act, 1944 requires determination of the wholesale cash price for which goods of like kind and quality are sold or are capable of being sold at the time of removal. The controlled price fixed under the Essential Commodities Act, 1955 and the relevant control order serves a different purpose, namely to prevent sales above the notified ceiling in the public interest. It does not conclusively determine the assessable value for excise purposes. The proper inquiry is whether the price claimed reflects a bona fide wholesale cash price realised or realisable in the ordinary course of business. The excise authorities failed to undertake that inquiry and treated the notified maximum price as conclusive.

Conclusion: The controlled price could be taken into account only as a relevant circumstance and not as the sole or conclusive basis for excise valuation. The assessment orders were unsustainable and were liable to be set aside, with reassessment directed on the correct legal basis.

Ratio Decidendi: For excise valuation under section 4, a statutory maximum price fixed under control legislation is not conclusive of wholesale cash price; the assessable value must be determined independently on the basis of the bona fide price realised or realisable in the ordinary course of business.

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