Statutory excise valuation must follow the place-of-removal price; executive trade notices cannot impose a different method.

Executive trade notices cannot override the statutory valuation scheme or bind assessing authorities on depot sales. Where a genuine wholesale price at the place of removal is ascertainable and the buyer is unrelated, excisable goods must be valued under section 4(1)(a) of the Central Excises and Salt Act, 1944. Section 4(2) is only a residuary provision and cannot be used when factory gate price is available. On the admitted facts, the departmental instructions, related communications, and show cause notices were set aside, and valuation was held to follow the primary statutory method.

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Issues: (i) Whether the trade notice and consequential departmental communications directing the assessee to file separate price lists for depot sales were valid in law. (ii) Whether, on the admitted facts, valuation of the excisable goods had to be made under section 4(1)(a) of the Central Excises and Salt Act, 1944 or whether resort could be had to section 4(2) of that Act.

Issue (i): Whether the trade notice and consequential departmental communications directing the assessee to file separate price lists for depot sales were valid in law.

Analysis: Rule 233 authorised only supplemental administrative instructions and could not be used to alter the statutory basis of valuation or control quasi-judicial assessment. A departmental direction requiring a different method of valuation would fetter the independent exercise of statutory discretion by the assessing authority and could not stand where the statute itself provided the governing method. The impugned trade notice was treated as an executive instruction outside the permissible scope of the rule-making power and contrary to the statutory scheme.

Conclusion: The trade notice and the consequential communications were invalid and liable to be quashed.

Issue (ii): Whether, on the admitted facts, valuation of the excisable goods had to be made under section 4(1)(a) of the Central Excises and Salt Act, 1944 or whether resort could be had to section 4(2) of that Act.

Analysis: The governing principle under section 4(1)(a) was the normal wholesale price at the time and place of removal where the buyer was unrelated and the price was the sole consideration. The quantum of sales at the factory gate was irrelevant once an ascertainable genuine wholesale price at the place of removal existed. Section 4(2) was a residuary provision and could be invoked only where the price at the place of removal was not known and valuation had to be made with reference to a different place. On the admitted facts, factory gate price was available and constituted the correct basis of assessment.

Conclusion: Valuation had to be made under section 4(1)(a), and recourse to section 4(2) was impermissible.

Final Conclusion: The writ petitions succeeded, the impugned trade notice, communications and show cause notices were set aside, and the assessments were held to be governed by factory gate valuation.

Ratio Decidendi: Where an ascertainable genuine wholesale price exists at the place of removal, valuation must be made under the primary statutory provision and not under a residuary provision, and executive instructions cannot direct a contrary method of assessment or bind quasi-judicial authorities.

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