Retail valuation under Rule 6(a) prevails where retail sales require adjustment to wholesale value, despite contrary departmental notice.

Excisable goods sold in retail were said to fall for valuation under Rule 6(a) of the Central Excise (Valuation) Rules, 1975, where retail price had to be adjusted to arrive at wholesale value, rather than under Section 4(1)(a) of the Central Excises and Salt Act, 1944. The Tribunal had already fixed assessable value on that basis, and once that order was affirmed by the Supreme Court, departmental authorities were bound to give effect to it. A contrary show cause notice was inconsistent with judicial discipline and could not stand.

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Issues: Whether goods manufactured and sold in retail were liable to be valued under Rule 6(a) of the Central Excise (Valuation) Rules, 1975 or under Section 4(1)(a) of the Central Excises and Salt Act, 1944, and whether the show cause notice could survive after the Tribunal's order had been affirmed by the Supreme Court.

Analysis: Rule 6(a) specifically governed valuation where excisable goods could not be valued under Rules 4 or 5 and were sold in retail, requiring reduction from retail price to arrive at the wholesale price. The Tribunal had already determined the assessable value on that basis, and the Department's challenge had been dismissed by the Supreme Court. Once stay was refused, the departmental authorities were bound to give effect to the Tribunal's order and could not proceed contrary to it. The impugned notice was therefore inconsistent with the binding adjudication and the principle of judicial discipline.

Conclusion: The goods were to be valued under Rule 6(a), not under Section 4(1)(a), and the show cause notice was quashed. The adjudicating authority was directed to determine the assessable value after obtaining necessary details and by giving effect to the Tribunal's order.

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