Excise valuation on goods manufactured for exclusive supply must use the manufacturer's sale price, not the buyer's resale price.

Transmission belting made in the petitioner's own factory with its own labour, machinery and raw materials, even if supplied exclusively to Goodyear under its brand, was treated as manufactured by the petitioner for central excise purposes. The assessable value had to be based on the wholesale price charged by the actual manufacturer to Goodyear, not on Goodyear's later resale price to dealers and customers. On refund, duty collected without authority of law is ordinarily refundable, but the Court did not grant immediate relief on the record; it left the petitioner to pursue a proper refund application before the statutory authority for consideration by a speaking order.

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Issues: (i) Whether the transmission belting manufactured by the petitioner for supply exclusively to Goodyear was to be treated as manufactured by Goodyear for the purpose of central excise duty and whether the assessable value was to be fixed on the price at which the petitioner sold the goods to Goodyear; (ii) Whether the petitioner was entitled to seek refund of duty collected in excess of the duty legally leviable.

Issue (i): Whether the transmission belting manufactured by the petitioner for supply exclusively to Goodyear was to be treated as manufactured by Goodyear for the purpose of central excise duty and whether the assessable value was to be fixed on the price at which the petitioner sold the goods to Goodyear.

Analysis: The goods were manufactured in the petitioner's own factory with its own men, machinery and raw materials under an arrangement requiring supply only to Goodyear under its brand name. On the facts found, Goodyear was not the manufacturer. For valuation, the governing rule was that excise duty on manufactured goods was to be assessed on the wholesale price applicable to the goods as sold by the actual manufacturer, and not on the downstream resale price of Goodyear to its dealers and customers. The agreement and the surrounding circumstances showed a sale by the petitioner in wholesale trade to Goodyear, and the branded character of the goods did not justify shifting the assessable value to Goodyear's resale price.

Conclusion: The petitioner was held to be the manufacturer, and assessable value had to be based on the price charged by the petitioner to Goodyear.

Issue (ii): Whether the petitioner was entitled to seek refund of duty collected in excess of the duty legally leviable.

Analysis: Money collected as tax or duty without authority of law is ordinarily refundable, subject to the absence of avoidable laches and the relevant factual and legal scrutiny at the departmental level. The Court did not grant an automatic refund on the record before it, but permitted the petitioner to make a proper refund application for consideration in accordance with law. The authority was directed to decide the application by a speaking and reasoned order, without being influenced by the Court's observations.

Conclusion: Refund relief was left open for consideration on a proper application, and no final refund order was made in the writ petition.

Final Conclusion: The assessment order was quashed to the extent that it proceeded on the wrong manufacturer and valuation basis, while refund was relegated to the statutory authority for fresh consideration in accordance with law.

Ratio Decidendi: Where goods are manufactured in the assessee's own factory on its own account, excise duty is to be assessed on the wholesale price charged by that manufacturer to the buyer, and not on the buyer's subsequent resale price.

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